Bank financing for SMEs in Pakistan

In this paper we consider the supply side of credit for Small and Medium enterprises (SME). Several studies have been done regarding the demand side. In this paper a survey of banks in Pakistan was done. We categorized those banks into different segments. We want to see how the banks perceive the Small and medium enterprises. The banks in Pakistan have started showing interest in the SME sector. Many banks are now establishing SME sections in their branches. The banks now perceive the SME sector to be very profitable and there is intense competition in the market. The State Bank of Pakistan (SBP) is continually trying to encourage this sector. It has introduced many policies and financial institutions other than banks to help in providing finances. The SMEs are seen as an emerging market and are contributing to both employment and economy. In this paper we want to check the willingness of these banks to provide credit. The lending and its requirements in Pakistan. We will determine how the collateral is valued.