Small & Medium Enterprises (SMEs) sector contributes significantly towards national GDP, employment generation and export earnings. Hence, the impact of financial inclusion of SMEs has important implications for economic growth, competitiveness, and job creation. The potential for this sector to contribute to the economic development objectives of Pakistan, in areas like creating jobs, increasing incomes, improving competitiveness, boosting exports and fostering economic growth is the justification for a strategy of support to unleash the sector’s potential.

LEVERAGING TECHNOLOGY TO PROMOTE SME FINANCING

Use of technological innovations in SME banking may pave the way for the banks to deliver their financial services to the target clients at a relatively low cost. The use of technology also reduces bank’s clients’ searching and exploring cost. Although branchless banking, internet banking and SMS alert services are becoming common as a norm of current banking practices, technology can also be used in broad banking services like cash management (by integrating payrolls, trade credits & receivables), credit origination (through online credit applications) and other services etc. As a modern concept, financial technology (FinTech) is used to facilitate financial services by using technology. It aims to provide products and services through online and mobile channels. Currently, financial institutions are using FinTech for better customer service delivery and speedy expansion of branchless banking in Pakistan.