Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has put forward a proposal to increase the borrowing limits for microenterprise and housing loans provided by non-banking microfinance companies. The suggested changes include raising the maximum loan limit to Rs. 5 million and increasing the income threshold for individual borrowers from Rs. 1.2 million to Rs. 1.5 million. These proposals are part of draft amendments aimed at enhancing the financial capacity of non-banking microfinance sectors.

According to Securities and Exchange Commission of Pakistan, the proposed amendments to the Non-Banking Finance Companies and Notified Entities Regulations, 2008, are open for public consultation. The SECP’s initiative seeks to enable non-banking finance companies to better cater to the evolving financial requirements of small and medium enterprises (SMEs). This involves revising the annual turnover criteria used to classify SMEs. The new proposed range for small enterprises is Rs. 30 million to Rs. 400 million, a substantial increase from the current limit of up to Rs. 150 million. For medium enterprises, the proposed turnover range is Rs. 400 million to Rs. 2 billion, compared to the existing range of Rs. 150 million to Rs. 800 million.

The SECP has expressed that these changes could potentially allow non-banking finance companies to serve a larger number of borrowers, thereby addressing the financing needs of businesses, households, and individuals more effectively. The draft amendments have been made available on the SECP’s website, and stakeholders have been invited to send their comments within 14 days to [email protected].