PM Removes 80% Export Requirement for SME Financing

Pakistan Removes 80% Export Requirement for SME Long-Term Financing

Prime Minister Shehbaz Sharif has directed the removal of the requirement that small and medium-sized enterprises (SMEs) must generate at least 80% of their revenue through exports to qualify for long-term financing in Pakistan.

The decision is expected to widen access to bank financing for businesses that want to expand production, purchase machinery, upgrade technology and improve their operational capacity but cannot meet the previous export-revenue threshold.

The Prime Minister also directed banks not to deviate from the government’s concessional financing schemes for SMEs and exporters, signalling a push to improve access to affordable credit for smaller businesses.

The announcement was made during a high-level meeting on November 5, 2026, focused on facilitating export-oriented SMEs and addressing challenges faced by businesses across Pakistan.

The meeting also reviewed the availability of financing, regulatory difficulties, accreditation requirements, laboratory facilities and the process of helping smaller businesses enter international markets.

According to officials, Pakistan has approximately 17,000 export-oriented SMEs. Meanwhile, the State Bank of Pakistan (SBP) has received more than 10,000 loan applications since launching a dedicated SME financing portal on November 1.

The government has also earmarked Rs300 billion under the Export Finance Scheme for SMEs and new exporters, while Rs350 billion has been allocated for the Long-Term Financing Facility during the current year.

Government Removes 80% Export Condition for SME Loans

The most significant decision concerns the eligibility requirement for long-term financing.

Previously, SMEs seeking access to the relevant financing facility were required to generate at least 80% of their revenue through exports.

This condition could make it difficult for businesses that sell products in both domestic and international markets to qualify, even when they have the potential to expand exports.

For example, a manufacturing company generating 60% of its revenue from local sales and 40% from exports could struggle to meet an 80% export-revenue requirement.

Removing this condition is intended to make long-term financing accessible to a wider group of SMEs.

Businesses that serve domestic customers while gradually developing their export operations may also benefit from improved eligibility, subject to the remaining requirements of the financing scheme.

The decision is particularly relevant for sectors such as textiles, engineering goods, food processing, auto parts, fans, information technology and other manufacturing industries.

However, removing the 80% condition does not mean that every SME will automatically qualify for a loan. Applicants will still need to meet the applicable financing, documentation, credit assessment and other eligibility requirements.

Why the 80% Export Requirement Was a Challenge

Small and medium-sized businesses often face difficulties when trying to obtain long-term financing from commercial banks.

Unlike large corporations, smaller businesses may have limited assets, shorter financial histories and fewer resources to meet extensive documentation requirements.

An export-revenue threshold can create another barrier.

Many Pakistani manufacturers operate through a combination of domestic sales and exports. They may initially serve local customers before investing in international certifications, production capacity, marketing and distribution networks.

Requiring a business to generate 80% of its revenue from exports before accessing long-term financing could make it difficult for some companies to secure the investment needed to increase their export capacity.

The removal of the condition could help businesses obtain financing earlier in their expansion process.

For example, a company manufacturing plastic packaging, electrical equipment, furniture or processed food may need machinery and production upgrades before it can compete effectively in international markets.

Access to long-term financing could help such businesses invest in those improvements.

The actual impact, however, will depend on how banks implement the revised eligibility requirements and how effectively SMEs can access the available funds.

Rs350 Billion Allocated Under Long-Term Financing Facility

The government has allocated Rs350 billion for the Long-Term Financing Facility (LTFF) during the current year.

The facility is intended to support eligible businesses seeking long-term financing for investment and productive capacity.

Such financing can help companies purchase machinery, modernise manufacturing facilities, improve production processes and expand their operations.

For SMEs, access to longer-term credit is particularly important because industrial investments often require several years to generate sufficient returns.

A business purchasing expensive machinery may not be able to repay the entire loan within a short period without putting pressure on its cash flow.

Longer financing periods can help distribute repayment obligations over time, subject to the terms of the relevant scheme.

The Prime Minister’s latest directive is intended to broaden access to this financing by removing the previous 80% export-revenue condition.

What Could SMEs Use Long-Term Financing For?

Eligible businesses may seek financing for investments such as:

• Purchasing new manufacturing machinery.
• Replacing outdated production equipment.
• Expanding factory capacity.
• Introducing automated production systems.
• Improving product quality and consistency.
• Establishing new production facilities.
• Upgrading technology and industrial processes.
• Investing in equipment required for export markets.

The specific activities and assets covered will depend on the facility’s applicable terms and conditions.

Rs300 Billion Set Aside for SMEs and New Exporters

In addition to long-term financing, the government has allocated Rs300 billion under the Export Finance Scheme for SMEs and new exporters.

The initiative is intended to support businesses involved in export-related activities and improve access to financing.

Export-oriented companies often need working capital to purchase raw materials, manufacture products, arrange packaging, meet shipment requirements and manage payment cycles.

A shortage of working capital can prevent smaller businesses from accepting large orders or entering new markets.

Financing facilities can help address these requirements, although the availability of credit depends on the applicable scheme conditions and bank assessments.

The Rs300 billion allocation and Rs350 billion long-term financing allocation represent separate financing provisions. They should not be treated as a single loan available automatically to every SME.

The combined figure represents the announced allocations for the two facilities, not confirmed disbursements or money already received by businesses.

SBP Receives More Than 10,000 SME Loan Applications

The State Bank of Pakistan launched a dedicated portal on November 1, 2026, to make it easier for small businesses to apply for financing.

According to the government briefing, the portal had received more than 10,000 applications by the time of the Prime Minister’s November 5 meeting.

The development indicates substantial interest among businesses seeking access to formal financing.

The portal is intended to help SMEs connect with banks and improve the loan application process.

A dedicated digital platform could also make it easier for businesses to understand available financing opportunities and submit applications without navigating multiple disconnected processes.

However, the number of applications should not be confused with the number of approved loans or funds disbursed.

Applications still need to go through the relevant assessment and approval procedures.

What Is the SME Connect Portal?

The government has also been reviewing the SME Connect portal as part of its broader efforts to improve financing access.

According to the Finance Division’s November 5 update, the platform is designed to enable small businesses to apply directly for loans and connect with financial institutions.

The government wants to improve the portal’s accessibility, transparency and efficiency.

Finance Minister Muhammad Aurangzeb has also emphasised the importance of increasing the number of new SMEs accessing formal credit.

The objective is not simply to increase the total value of lending but also to reach a wider range of smaller businesses that have historically struggled to obtain bank financing.

Banks Directed to Follow Concessional Financing Schemes

Prime Minister Shehbaz Sharif also instructed that no bank should deviate from implementing the government’s concessional financing schemes for SMEs and exporters.

This directive addresses concerns about whether eligible businesses can access financing under the announced support programmes.

Concessional financing generally refers to loans offered on terms that are more favourable than ordinary commercial lending, potentially including reduced interest rates or other supported conditions.

For smaller businesses, the cost of borrowing can significantly influence investment decisions.

High financing costs may discourage companies from purchasing machinery, expanding factories or investing in new technology.

The government’s directive is intended to improve implementation and ensure that banks follow the applicable scheme rules.

However, the announcement does not mean that banks must approve every application. Financial institutions will still need to conduct the required credit assessments and follow relevant lending regulations.

The effectiveness of the directive will depend on how consistently banks implement the financing arrangements and how quickly eligible applicants receive decisions.

Government Plans Modern Laboratories for Exporters

The Prime Minister’s meeting also focused on non-financial barriers affecting Pakistani exporters.

One important issue is the availability of testing and accreditation facilities.

Businesses exporting products to international markets may need to meet technical standards, obtain certifications and provide laboratory test reports.

These requirements can be particularly challenging for smaller companies that do not have easy access to recognised testing facilities.

The Prime Minister directed authorities to improve accreditation standards, expand laboratory facilities and establish modern laboratories closer to businesses.

The objective is to make testing and certification services more accessible to exporters.

Why Testing Laboratories Matter for Pakistani Businesses

International buyers and regulators often require products to meet specific quality, safety and technical standards.

Depending on the product, exporters may need testing for:

• Product quality and durability.
• Chemical composition.
• Food safety and hygiene.
• Electrical and mechanical performance.
• Packaging quality.
• Material specifications.
• Compliance with international standards.

If testing facilities are limited or located far from industrial centres, smaller businesses may face additional costs and delays.

Expanding laboratory infrastructure could help exporters complete testing and certification procedures more efficiently.

It could also improve the ability of Pakistani manufacturers to demonstrate that their products meet the requirements of overseas customers.

SMEs Raise Concerns About Taxes, Refunds and Provincial Levies

During consultations with SME representatives, businesses highlighted several challenges affecting their operations.

The discussions covered taxes, refunds, provincial levies, accreditation, logistics, payments and access to financing.

These issues are interconnected.

For example, delays in tax refunds can affect a company’s working capital. A business may have sufficient orders but lack the cash needed to purchase additional raw materials or pay suppliers.

Similarly, complicated regulatory procedures can increase the time and cost required to manufacture and export products.

Logistics expenses and payment delays can also reduce the competitiveness of smaller exporters.

The government has indicated that it wants to address these problems through better coordination among relevant ministries, financial institutions and business support organisations.

Removing the export-revenue condition is therefore one part of a wider effort to improve the operating environment for SMEs.

Around 17,000 Export-Oriented SMEs Operating in Pakistan

Officials informed the Prime Minister’s meeting that approximately 17,000 SMEs in Pakistan are associated with exports.

These businesses operate across a range of industries, including manufacturing, engineering, food processing, textiles, technology and other commercial activities.

SMEs can contribute to economic growth by creating employment, developing local supply chains and introducing Pakistani products to international markets.

However, many smaller businesses require investment to increase production capacity and meet the requirements of overseas customers.

Access to finance, technical support, modern machinery and recognised certification facilities can play an important role in helping these businesses grow.

The government’s latest measures are intended to address several of these requirements.

Pakistan Also Wants to Expand Exports to African Markets

The government is also exploring opportunities to increase Pakistan’s exports to African countries.

Expanding into new markets could provide Pakistani businesses with additional opportunities to sell manufactured goods, processed products and other exportable items.

However, entering international markets requires more than identifying potential buyers.

Businesses must understand local regulations, product standards, distribution arrangements, payment systems and logistics requirements.

SMEs may face particular difficulties because they have fewer resources than large exporters.

Improved financing and testing facilities could help smaller companies prepare their products for new markets.

The government has indicated that measures are being considered to support this broader export expansion effort.

What the Decision Means for Pakistani Manufacturers

The removal of the 80% export requirement could be particularly relevant to manufacturers that sell products in both domestic and international markets.

Consider a hypothetical manufacturing company with annual sales of Rs100 million.

If Rs60 million comes from local customers and Rs40 million comes from exports, the company would previously have fallen short of an 80% export-revenue requirement.

Removing that condition could allow it to seek long-term financing without meeting the previous export threshold, provided it satisfies the remaining requirements.

This may be useful for businesses that want to expand their production facilities before increasing their international sales.

Potential beneficiaries could include manufacturers of:

• Plastic packaging and household products.
• Electrical fans and appliances.
• Automotive components.
• Engineering equipment.
• Furniture and wooden products.
• Processed food and beverages.
• Textile and garment products.
• Industrial components and machinery.

For these businesses, access to financing could support investment in production capacity, quality control and modern technology.

However, the actual benefit will depend on the revised scheme rules, loan pricing, repayment periods and banks’ assessment criteria.

How SMEs Can Prepare to Apply for Financing

Businesses interested in the available financing schemes should prepare their financial and operational records before approaching banks.

Although exact documentation requirements depend on the facility and financial institution, SMEs can begin by organising the following information:

Businesses should also confirm whether they qualify under the relevant SME category and financing facility.

The removal of the 80% export condition should not be interpreted as the removal of every other eligibility requirement.

Applicants should consult participating banks and the official SBP financing information before submitting applications.

Frequently Asked Questions

What export condition has Pakistan removed for SME financing?

The Prime Minister has directed the removal of the requirement that SMEs must generate at least 80% of their revenue through exports to qualify for long-term financing.

When was the decision announced?

Prime Minister Shehbaz Sharif issued the directive during a high-level meeting on November 5, 2026.

How much financing has been allocated for SMEs?

The government has allocated Rs300 billion under the Export Finance Scheme for SMEs and new exporters and Rs350 billion under the Long-Term Financing Facility during the current year.

How many SMEs have applied through the SBP portal?

The government briefing reported that more than 10,000 loan applications had been received after the portal’s launch on November 1, 2026.

Does removing the 80% export requirement guarantee loan approval?

No. It removes one eligibility condition for long-term financing. Applicants must still satisfy the remaining requirements of the financing facility and the relevant bank’s credit assessment procedures.

Can businesses selling products in Pakistan and abroad apply?

The removal of the 80% export-revenue condition is intended to make long-term financing more accessible to businesses that do not generate nearly all their revenue from exports. Final eligibility will depend on the revised scheme requirements.

What is the purpose of the SME Connect portal?

The portal is designed to help small businesses apply for loans and connect with financial institutions, making the financing process more accessible and transparent.

Will the government establish more testing laboratories?

The Prime Minister has directed authorities to expand laboratory facilities and establish modern laboratories to help exporters access testing and certification services more easily.

Conclusion

Pakistan’s decision to remove the 80% export-revenue requirement for SME long-term financing could widen access to credit for businesses operating in both domestic and international markets.

The Prime Minister has also directed banks to follow concessional financing schemes, while the government has announced Rs300 billion for SMEs and new exporters under the Export Finance Scheme and Rs350 billion for the Long-Term Financing Facility.

More than 10,000 applications have reportedly been received through the SBP’s dedicated SME financing portal since its launch on November 1.

The government is also working to address wider challenges involving taxes, refunds, provincial levies, accreditation, logistics and laboratory facilities.

For Pakistani manufacturers and smaller businesses, the effectiveness of these measures will depend on how quickly the revised financing conditions are implemented and whether eligible companies can obtain affordable credit.

If successfully implemented, the changes could help more businesses invest in machinery, improve production capacity and gradually expand their presence in international markets.