Expanded Sales Turnover Limits
The State Bank of Pakistan has updated its Prudential Regulations for SME Financing through SH&SFD Circular No. 03 of 2026. Under the revised criteria, the annual sales turnover limit for Small Enterprises has been raised from PKR 150 million to PKR 400 million, covering entities with sales above PKR 30 million up to PKR 400 million. Medium Enterprises now encompass businesses with turnover exceeding PKR 400 million up to PKR 2 billion (or PKR 2,000 million), increasing from the previous upper limit of PKR 800 million. Micro Enterprises continue to be defined as enterprises with an annual sales turnover of up to PKR 30 million.
Formal Definition for Start-ups
The regulatory revision introduces a dedicated categorization for start-ups. Under the updated framework, any Micro, Small, or Medium Enterprise operating for up to five years is formally classified as a start-up, establishing a clear designation within the SME financing structure.
Timeline and Bank Implementation
The revised definitions came into force with immediate effect upon issuance on July 16, 2026. While the policy applies across Pakistan to commercial banks, Development Finance Institutions (DFIs), and business owners, individual commercial banks may require additional time to adjust their internal credit evaluation systems and roll out specialized financing products for start-ups.
Next Steps for Businesses
Enterprises and entrepreneurs should review their annual sales figures to determine their updated SME status. Eligible businesses can contact participating commercial banks or DFIs to inquire about financing schemes and credit facilities accessible under the expanded regulations.