Ministry of Finance and Karandaaz Pakistan launch Pakistan’s first specialised Credit Guarantee Company for SMEs

ISLAMABAD, January 12, 2024: National Credit Guarantee Company Limited (NCGCL) will be the first- ever specialised market-based SME credit guarantee facility for enhancing SMEs’ access to finance in Pakistan, said Dr. Shamshad Akhtar, the caretaker minister for Finance, Revenue, and Economic Affairs, on the launch of Pakistan’s first specialised credit guarantee company for SMEs in collaboration with Karandaz.

During her keynote address, Dr Shamshad Akhtar emphasised the importance of enhanced SME credit, which at present stands at 5.2% of the total private credit in Pakistan. She underscored that with over

1.5 million SMEs and an estimated market size exceeding PKR 3.7 trillion, the NCGCL will craft products to de-risk SME financing, collaborating with financial institutions to bolster credit availability across diverse market segments. This transformative initiative aims to revolutionise SME credit accessibility across Pakistan, leveraging capital allocation for SMEs to generate higher economic growth, employment, and development impact.

Addressing the audience, Ms Jane Marriott, British High Commissioner to Pakistan, highlighted NCGCL’s core objectives: extending financial inclusion and fortifying SME credit penetration. The NCGCL’s initial capitalisation of approximately PKR 6 billion, exclusively provided by the UK Government under its Financial Inclusion Program, underscores the UK’s commitment to this cause.

Mr Waqas ul Hasan, CEO Karandaaz, shared that Karandaaz specialises in the creation of development finance instruments which push the needle for making capital available to underserved individuals and firms. NCGCL will have the ability to partner with full range of bank and non-bank financial institutions and will pursue financial inclusion agenda with well-defined development impact objectives.

Focusing on developmental goals and economic sustainability, the NCGCL anticipates nearly PKR 50 billion additional exposure in the Pakistani market. Given that SMEs create jobs, contribute to economic growth and exports, NCGCL is expected to create significant impact for the country.

Karandaaz Pakistan is committed to fostering financial access for micro, small, and medium-sized enterprises through diverse investment platforms, promoting technological solutions for financial inclusion. Leveraging a portfolio of debt and equity instruments, it actively supports SME finance in Pakistan.

Notable attendees at the event included representatives from the British High Commission Islamabad, Securities and Exchange Commission of Pakistan (SECP), State Bank of Pakistan and the Ministry of Finance, underscoring the collaborative commitment towards fortifying SME credit and financial inclusion.