SMEDA signs ICMA, DigiKhata deals to widen small-business credit

The Small and Medium Enterprises Development Authority has signed a memorandum of understanding with the Institute of Cost and Management Accountants of Pakistan and a letter of intent with the digital finance platform DigiKhata, aimed at improving financial records and bank access for micro, small and medium enterprises.

The memorandum and the letter of intent were signed at SMEDA's Lahore office on Thursday. The government wants SME financing to reach Rs2.2 trillion and the number of SME borrowers to rise to 775,000 by June 2028, and the authority said the two partnerships are meant to serve those targets.

Under the ICMA Pakistan agreement, the two sides will run capacity-building programmes and advisory services on bookkeeping, financial reporting and financial management. SMEDA says the training is intended to help small firms produce the documentation commercial banks ask for before they lend.

Raja Hassanein Javed, SMEDA's general manager for enterprise competitiveness and growth, said stronger documentation, bank readiness and creditworthiness were necessary if the financing targets were to be met. ICMA Pakistan president Muhammad Yasin said the accountancy body would contribute its training and research work and called for coordinated efforts to make small businesses bankable. ICMA vice president Abdul Qayyum and the institute's Lahore director, Muhammad Sajjad Aheer, attended.

The letter of intent with DigiKhata covers the promotion of digital bookkeeping in place of manual registers. SMEDA expects digital transaction records to make it easier for lenders to assess a small business and to bring more enterprises into the formal system.

DigiKhata chief executive Adnan Aslam said the platform has one million active users and offers direct and indirect lending, export facilitation and account opening under the State Bank of Pakistan's Open Banking Framework. Its business unit head, Sayyaf Haider Warraich, and national sales manager Bilal Saleem attended, along with SMEDA's Sheharyar Tahir, Syed Bilal Haider, Farah Yasir, Shaheen Tahir and Arif Chaudhry.

SMEDA said the arrangements are part of a wider effort to bring financial institutions, business associations and development partners together so entrepreneurs know what lenders require. The authority did not say how many businesses it expects the two arrangements to reach.