The Securities and Exchange Commission of Pakistan has proposed increasing the maximum financing limit for microenterprise and housing loans to Rs5 million, potentially giving eligible borrowers greater access to financing through non-banking microfinance companies.
The proposed changes form part of draft amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008, which have been released for stakeholder consultation.
SECP listed the draft amendments, issued as SRO 1638(I)/2026, on September 29, 2026. The proposals are therefore not yet final regulations.
If adopted, the amendments would also raise the income threshold used for microfinance borrowers and substantially expand the annual turnover ranges used to classify small and medium-sized enterprises.
What Loan Limit Is SECP Proposing?
Under the proposed changes, the maximum financing limit available for eligible microenterprise and housing finance would increase to Rs5 million.
This represents another sizeable expansion of the regulated microfinance lending ceiling.
In November 2025, SECP had already increased the loan-size limits for microenterprise and housing finance from Rs1.5 million to Rs3 million as part of amendments to its NBFC lending framework.
The latest proposal would therefore take the ceiling from Rs3 million to Rs5 million — an increase of around 66.7%.
However, borrowers should not assume that Rs5 million loans are already available under the new regulatory ceiling. The amendments remain at the consultation stage and will only become effective if and when SECP finalises and formally notifies them.
Borrower Income Threshold Could Rise to Rs1.5 Million
SECP is also proposing to increase the annual income threshold applicable to individual borrowers in the microfinance segment.
The threshold would rise from:
Rs1.2 million per year to Rs1.5 million per year.
That represents a 25% increase.
The change could expand the number of individuals who fall within the regulatory definition used for microfinance lending by non-banking microfinance companies.
Importantly, a higher regulatory threshold would not automatically guarantee approval for a loan.
Lenders would still be expected to assess applicants under their credit policies, including factors such as repayment capacity, credit history, existing liabilities and applicable regulatory requirements.
SECP Also Wants to Expand SME Definitions
The proposed amendments go beyond individual microfinance and housing loans.
SECP is also seeking to revise the annual turnover thresholds used to classify small and medium-sized enterprises under the NBFC framework.
Under the proposed structure, businesses would broadly fall into the following turnover ranges:
- Micro enterprise: annual turnover of up to Rs30 million
- Small enterprise: above Rs30 million and up to Rs400 million
- Medium enterprise: above Rs400 million and up to Rs2 billion
The changes would significantly increase the turnover ceilings compared with the previous SME classifications.
Why Are the SME Limits Being Increased?
SECP says the proposed SME thresholds are intended to align its framework with changes already introduced by the State Bank of Pakistan.
The SBP revised its regulatory SME definitions on July 16, 2026.
Under the State Bank’s updated framework, a micro enterprise can have annual sales turnover of up to Rs30 million, a small enterprise can have turnover above Rs30 million and up to Rs400 million, while a medium enterprise can have turnover above Rs400 million and up to Rs2 billion.
Before the latest SBP revision, the regulatory definitions generally placed small enterprises at up to Rs150 million in annual sales turnover and medium enterprises above Rs150 million and up to Rs800 million.
Bringing SECP’s NBFC framework into line with those newer thresholds would create greater consistency between businesses seeking financing from banks and those dealing with regulated non-bank financial companies.
What Is a Non-Banking Microfinance Company?
Non-banking microfinance companies operate under SECP’s regulatory framework rather than the banking regulatory structure supervised by the State Bank of Pakistan.
They provide financial services to eligible individuals and businesses, including various forms of microfinance.
The distinction is important because SECP’s proposed amendments apply to entities operating under the NBFC Regulations, 2008 rather than changing every bank loan available in Pakistan.
A Rs5 million regulatory limit therefore should not be interpreted as a new government loan scheme under which every Pakistani can apply for Rs5 million.
It instead defines how much financing eligible regulated institutions may provide within specified categories, subject to the final regulatory framework and lenders’ own approval processes.
What Could the Higher Housing Finance Limit Mean?
Housing costs have risen substantially over time, making older financing ceilings increasingly restrictive for borrowers attempting to purchase, build or improve homes.
Increasing the permitted financing limit to Rs5 million would give non-bank microfinance institutions greater room to structure housing finance products for eligible customers.
The practical impact will still depend on factors including interest or profit rates, repayment periods, borrower income requirements, collateral policies and individual lenders’ risk assessments.
SECP’s proposal therefore increases the regulatory ceiling rather than guaranteeing that every qualifying borrower will receive the maximum amount.
Higher Limit Could Give Microenterprises More Financing Room
The increase may also be significant for microenterprises.
Small businesses frequently require capital to purchase equipment, maintain inventory, expand operations or meet working-capital requirements.
A Rs3 million ceiling can become restrictive as equipment, raw-material, rent and other business costs rise.
Allowing financing of up to Rs5 million would provide regulated microfinance companies with additional capacity to finance eligible businesses where lenders determine that borrowers have sufficient repayment ability.
The change also fits into a broader regulatory effort to improve formal financing access for businesses that may not traditionally rely on large commercial bank facilities.
Is the Rs5 Million Loan Limit Effective Now?
No.
This is one of the most important points for potential borrowers.
SECP has issued the amendments for consultation, meaning stakeholders and interested parties can provide feedback before the regulator finalises the framework.
Until final amendments are formally notified, the proposed Rs5 million ceiling should not be presented as an already operational nationwide loan programme.
Social-media posts claiming that SECP has launched a new Rs5 million government loan for everyone would therefore be misleading.
The proposal concerns regulatory limits for financing provided by eligible financial institutions.
SECP Has Been Reforming NBFC Lending Rules
The latest proposal follows broader changes introduced to Pakistan’s non-bank lending framework.
In November 2025, SECP notified comprehensive amendments to the NBFC Regulations that included higher microenterprise and housing financing limits, changes to peer-to-peer lending rules, a simplified borrower factsheet and measures intended to strengthen transparency and consumer protection.
SECP has also continued to tighten rules governing digital consumer lending.
On September 25, 2026, the regulator announced pricing caps and other requirements for NBFCs offering digital personal loans through mobile applications, describing the measures as part of its responsible-lending and consumer-protection framework.
The latest loan-limit proposal therefore sits within a wider effort to expand access to credit while maintaining regulatory oversight of non-bank lenders.
How Could Borrowers Benefit?
If the amendments are approved, some borrowers could potentially benefit in two ways.
First, borrowers already falling within eligible microenterprise or housing categories could have access to a higher maximum financing amount.
Second, raising the annual income threshold from Rs1.2 million to Rs1.5 million could bring additional individuals within the relevant microfinance eligibility definition.
For businesses, the significantly expanded SME turnover thresholds could also allow larger enterprises to remain classified within regulated SME financing categories.
Actual access to credit would still depend on lender policies and a borrower’s financial position.
What Happens Next?
SECP will consider feedback received during the consultation process before deciding whether to finalise the proposed amendments.
Changes may be retained, revised or otherwise adjusted before the final regulations are notified.
Businesses and potential borrowers should therefore rely on SECP’s final notification rather than treating draft figures circulating in news reports or on social media as immediately applicable rules.
Once finalised, the amendments could represent another substantial expansion of Pakistan’s regulated non-bank microfinance and SME financing framework.
Bottom Line
SECP has proposed increasing the maximum microenterprise and housing finance limit to Rs5 million, up from the Rs3 million limit introduced in 2025.
It also wants to raise the individual borrower income threshold from Rs1.2 million to Rs1.5 million and expand SME classifications to match the State Bank’s updated definitions.
Under the proposed framework, small enterprises could have annual turnover of up to Rs400 million, while medium enterprises could fall within a range extending to Rs2 billion.
The changes could broaden financing access for households and businesses, but the Rs5 million ceiling has not yet become a final rule. The draft remains open to the regulatory consultation and finalisation process.