Pakistan's SMEs Get a Boost with First-Ever Credit Guarantee Company

ISLAMABAD, Pakistan – Small and medium-sized enterprises (SMEs) in Pakistan have reason to celebrate. The Finance Ministry has launched the country’s first-ever credit guarantee company, the National Credit Guarantee Company Limited (NCGCL), designed to revolutionize access to finance for this crucial sector.

The launch, attended by representatives from key stakeholders, marks a significant step towards alleviating the challenges faced by Pakistani SMEs. With private credit hovering around 5.2%, significantly lower than the South Asian average of 17%, SMEs have long struggled to secure the funding they need to thrive.

Fueling Growth and Opportunity

Dr. Shamshad, Minister for Finance, emphasized the potential of NCGCL to unlock growth and opportunity. Recognizing the vital role of SMEs in driving Pakistan’s economy, she highlighted their contribution to:

90% of formally registered businesses
40% of GDP
80% of non-agricultural labor force

NCGCL: Paving the Way for Success

This innovative initiative aims to bridge the financial gap by providing:

Special credit guarantee facilities
Tailored products catering to diverse SME needs
Guaranteed access to credit

Dr. Shamshad estimates that NCGCL can inject 30-35% financial additionality into the market, leading to significant economic benefits through:

Increased productivity and innovation
Enhanced employment generation

A Bright Future for SMEs

With NCGCL paving the way for easier access to finance, Pakistani SMEs are poised for unprecedented growth. This landmark initiative opens doors for businesses to secure the resources they need to flourish, contributing to a more vibrant and dynamic Pakistani economy.