ISLAMABAD (ABC) – In light of Pakistan’s efforts to fortify the SME sector through the introduction of prudential regulations, experts and stakeholders advocate for proper implementation of regulations to unlock the full potential of SMEs and foster investor confidence, WealthPK.
Prudential regulations, which encompass various aspects such as credit policies, risk management practices, and transparency measures, are designed to streamline lending procedures, mitigate risks, and promote responsible financing to support the growth and development of SMEs across Pakistan.
“While the introduction of these regulations marks a significant step forward towards addressing the financial needs of the SMEs, it is critically important to ensure their proper implementation to realize the intended benefits and build investor confidence in the SME financing ecosystem,” Ikhtiar Ahmed, Senior Joint Director at the State Bank of Pakistan, told WealthPK.
Ahmed stressed the need for robust monitoring and oversight mechanisms to ensure compliance with the regulations and prevent any instances of non-compliance or circumvention.
This includes regular audits, inspections, and reporting requirements to assess the effectiveness of regulations and address any shortcomings or loopholes in their implementation.
Ahmed highlighted the importance of capacity-building initiatives targeted at both financial institutions and SMEs to enhance awareness and understanding of the regulations.
Training programs, workshops, and educational campaigns can play a crucial role in fostering a culture of compliance and accountability among the stakeholders, thereby strengthening the foundation of SME financing in Pakistan.
“By ensuring proper implementation of prudential regulations, Pakistan can create a conducive environment for SME growth and innovation, attract investment, and bolster economic prosperity.
The investors and stakeholders are encouraged to actively engage with regulatory authorities and financial institutions to advocate for effective enforcement of these regulations and contribute to the sustainable development of the SME sector,” said Muhammad Athar, cluster head at the National Idea Bank Pakistan (NIB).
He said while the introduction of prudential regulations represented a positive step towards enhancing SME financing in Pakistan, their proper implementation was imperative to realize the full potential and build investor confidence.
With concerted efforts from all stakeholders, Pakistan can unlock the transformative power of SMEs and pave the way for inclusive economic growth and prosperity.