Lahore: The Small and Medium Enterprises Development Authority (SMEDA) has embarked on a collaborative research project with Lahore School of Economics (LSE) and the University of Chicago to investigate SME finance and lending practices in Pakistan. This initiative aims to understand why small and medium enterprises (SMEs) in the country seldom utilize formal bank loans, examining factors such as managerial preferences and informal screening by loan officers.

This research, under SMEDA's Research, Regulatory Insight and Advocacy Assistance (RRI and A) for SMEs Project, begins with a nationwide survey targeting SMEs to gather data on current lending practices and challenges. Mr. Socrat Aman Rana, CEO of SMEDA, stressed the importance of this partnership in enhancing SME access to finance, vital for their competitiveness in the global market.

Dr. Hamna Ahmad from LSE emphasized the importance of integrating academic research with industry needs to tackle real-world SME challenges. The University of Chicago’s Emma Zhang pointed out the global perspective their institution brings to the study, aiming to produce data-driven insights that can reform SME financing in Pakistan.

Ms. Nadia Jahangir Seth, Project Director RRI and A, highlighted that the study’s outcomes will be pivotal in designing tailored lending programs and capacity-building initiatives. She encouraged SMEs to participate in the survey to aid in developing financial products and advocacy efforts that promote SME-friendly banking practices.

This research is part of a broader SMEDA strategy to empower SMEs through various initiatives, including financial literacy improvements and advocacy for supportive policies, aiming to integrate SMEs into the formal financial ecosystem.