Karachi: The Union of Small and Medium Enterprises (UNISAME) announced a proposal to create a dedicated SME Leasing Company to address the financing shortfall left by the closure of SME Bank Limited and its subsidiary, SME Leasing Limited. This new entity aims to provide asset-based financing solutions crucial for small and medium enterprises, which currently receive only a fraction of the credit offered to their counterparts in neighboring countries.
According to Union of Small and Medium Enterprises, President Zulfikar Thaver highlighted the limited access to private-sector credit for SMEs in Pakistan, contrasting it with higher percentages in India and Bangladesh. With the dissolution of SME Leasing Limited, there is a gap in specialized providers for asset-based financing. Thaver noted the potential for a professionally managed SME leasing company to fill this void, offering financial solutions for sectors such as textiles, food processing, and light engineering, as well as lease-to-own arrangements for commercial properties and income-generating assets.
The UNISAME Council emphasized the benefits of a Shariah-compliant structure, noting that leasing (Ijarah) aligns with Islamic finance principles and is widely used in Pakistan. The proposed company could operate as a fully Islamic leasing entity or through a dedicated Islamic window, potentially attracting investment from Islamic banks and investors. UNISAME is inviting banks, development finance institutions, and private equity investors to co-found the company, with an initial paid-up capital of Rs. 1-2 billion.
Planned as a Non-Banking Finance Company (NBFC) licensed by the SECP, the company could initially operate as a non-deposit-taking entity, with the possibility of upgrading later. UNISAME will provide advisory support, leveraging its network to convene SME demand and assist with product design and regulatory engagement. The company will be managed by a professional board with expertise in NBFC and banking, and its risks will be mitigated through asset-backed leasing and diversified origination across sectors and regions. The proposal invites interested investors to signal their commitment and participate in foundational discussions, though it is not a solicitation for securities.