SECP Proposes Rs5 Million Loan Limit, Expands SME Thresholds

The Securities and Exchange Commission of Pakistan (SECP) has put forward a proposal to raise the maximum borrowing limit for microfinance and housing loans to Rs5 million, as part of a wider effort to update financing regulations and improve access to credit.

The draft amendments, issued for public and stakeholder feedback, also seek to ease income-based eligibility requirements for microfinance borrowers. Under the proposed changes, the maximum annual income permitted for applicants would increase from Rs1.2 million to Rs1.5 million.

In addition to revising individual loan limits, the regulator plans to significantly expand the annual turnover thresholds used to categorise small and medium-sized enterprises (SMEs).

Under the proposed framework, businesses generating annual turnover of up to Rs400 million would qualify as small enterprises, compared with the existing upper limit of Rs30 million.

For medium-sized businesses, the maximum annual turnover threshold would be raised from Rs800 million to Rs2 billion.

These revisions would expand the pool of businesses eligible to fall within the SME categories defined under the regulatory framework.

The SECP said the proposed turnover limits for small and medium-sized businesses had been brought into line with recent changes made by the State Bank of Pakistan.

However, the proposed amendments remain under consideration and have not yet been formally approved. The commission has invited relevant stakeholders and other interested parties to provide feedback, comments and recommendations before the revisions are finalised.