ISLAMABAD: The government took stock of substantial progress achieved in enhancing access to finance, with housing finance growing to Rs307 billion from about Rs294 billion as of the end of June. The housing finance rises observed in applications, approvals, and disbursals for housing, agriculture, small and medium enterprises, and electric vehicles. Minister for Finance and Revenue, Muhammad Aurangzeb, presided over the bi-weekly meeting of the Access to Finance Steering Committee at the Finance Division on Tuesday.
Housing Finance Rises: Broad Progress Across Priority Sectors
During their meeting, members reviewed the implementation status of key programs related to enhancing accessible financial services for various segments of the economy, including housing, agriculture, small & medium enterprises, export sector, information technology, renewable energy, among others. The committee highlighted considerable gains achieved under certain Access to Finance initiatives post-fiscal year 2025-26, along with vital reforms in the financing landscape.
Pakistan’s finance minister emphasized that the goal was to harness its financial sector capacity towards productive investments, business formation, housing, agriculture efficiency gains, and exports to foster robust, private-sector-led and inclusive economic growth.
The finance minister highlighted that it was important to harness the capacity of the financial sector for making productive investments, fostering entrepreneurship activities
Significant progress was made under the Wazir-e-Azam Apna Ghar Program - Ghar Ho To Apna amid housing finance rises to Rs307 billion. Application submissions surged 52 percent to close to 139,000 applications; approval rate surged 84 percent to 46,000 applications; approved financing more than doubled from Rs144 billion to Rs279 billion, whereas disbursement of loans surged 59 percent to 7,600 loans totaling Rs38 billion.
The momentum has been boosted by robust legislation aimed at taking mortgage lending forward. These have included amendments made by the State Bank of Pakistan to the Housing Finance Prudential Regulations. The new regulations feature an LTV ratio of 90:10, debt-to-income ratio of 65 percent, methods to determine informal income, easier valuations of properties, streamlined paperwork, digital processing, and extended tenures.
Among others, the committee emphasized the recent enactment of the Financial Institutions (Recovery of Finances) (Amendment) Act, 2026 (FIRA), which it described as an important structural reform in terms of the enhancement of the recovery and enforcement of mortgages financing system within the country’s laws.
As per the analysis conducted by the committee, this improvement in the recovery system will help in enhancing lenders’ confidence and ensuring easy access to mortgage financing facilities in Pakistan.
It should be noted here that as the financing gap is overcome gradually with increasing demand for housing loans, the housing/construction sector must also contribute to providing adequate amounts of quality homes to cater to rising demand. As mentioned by the Committee, such an arrangement will help generate an overall multiplier impact on construction activities, cement, building materials, allied sectors, small and medium enterprises, employment generation, and economy-wide economic activity.
The number of agriculture borrowers stood at 3.37 million mid-August this year, up from about 3.26 million as of end-June, adding some 115,000 new borrowers. Meanwhile, agriculture lending stood flat at about Rs1.26 trillion.
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Under Zarkhez-e-Asaan Zarai Qarza, more than 58,000 farmers have enrolled themselves under a programme aimed at providing unsecured loans to small holder farmers, including tenant farmers, for their farming requirements. From June onwards, bank approvals have risen around 12% to almost 16,700, approved finance ceiling climbed to above Rs7.2 billion, and disbursements rose around 13% to almost 5,000
Regarding SMEs, formal finance amounted to about Rs1.05 trillion, which includes around 330,000 companies. The Committee considered a pilot project using credit scoring, being conducted among 13 banks, focusing on enhancing evaluation via proxies and alternative approaches for determining cash flows, thus increasing accessibility outside of conventional collateralized lending schemes. Aim for mid-term is scaling up agriculture and SME financing to Rs1.5 trillion by June 2027 and to Rs2 trillion by June 2028.
The Access to Finance Working Group highlighted the importance of linking Access to Finance with export-led economic growth strategy adopted by the government. The working group analyzed the availability of improved financial and refinance facilities offered to exporters and SMEs, particularly those related to short-term funding requirements and medium-to-long-term investments.
In addition, the Performance-Based Rebate on Incremental Exports (PRIE), introduced from July 1, 2026, was praised by the working group. Under this scheme, exporters who record an increment of up to 10% would receive a 1% rebate on incremental exports, while increments above 10% would qualify for a 2% rebate on incremental exports.
Efforts are underway to ensure that SMEs engaged in exporting activities have easy access to funds provided by commercial banks under schemes operated by EXIM Bank of Pakistan.
An update on the progress made through the Pakistan Accelerated Vehicle Electrification (PAVE) initiative was also presented to the Committee. According to statistics revealed during the meeting held on Thursday, as many as 83,000 application submissions had been made, out of which roughly 15,800 were granted approval, with 4,000 loans having already been disbursed.
Furthermore, there have been substantial improvements since June. Approvals have increased by about 24 percent month-on-month, loan disbursements up 34 percent, and electric vehicles delivered increasing three times to cross the figure of 1,500 from 471. The Committee also deliberated upon the Prime Minister.
Finance Minister highlighted that Access to Finance needs to be implemented as a comprehensive economic enabler strategy involving legal/regulatory reforms, digitization, effective credit appraisal, targeted finance, risk sharing, refinance, and results-based incentives. Financing, number of borrowers, approvals, and disbursements will be monitored every week and every month individually bank-wise. In this regard, implementation challenges will be raised before the Steering Committee along with recommendations to resolve the issues.
In his concluding remarks, Senator Muhammad Aurangzeb highlighted that access to finance boils down to increasing access to opportunities. He emphasized that with an ever-growing Access to Finance ecosystem, there will be an increase in investments, construction projects, agriculture production, competitiveness of small and medium enterprises (SMEs), exports, job creation, and sustainable economic growth, stressing the need for collaboration between the Finance Division, State Bank of Pakistan, Securities and Exchange Commission of Pakistan, Pakistan Banks’ Association, ministries, financial institutions, and all related stakeholders.