The State Bank of Pakistan (SBP) has established a Challenge Fund for SMEs (CFS) to discover and encourage innovative SME banking solutions in Pakistan.
The purpose of CFS is to encourage banks to create new technical solutions for the banking requirements of small and medium-sized businesses (SMEs). This will aid the SME sector in gaining access to and using financial services. It has the potential to play a significant role in the digitization of finance and payments in the future.
SME banking in the digital age encompasses a wide variety of financial services that may be accessible and supplied at low prices through digital channels. It may help to raise living standards by facilitating access to inexpensive credit and fostering entrepreneurship. By 2025, it is anticipated that the market potential for Digital Finance Services in Pakistan would exceed $36 billion, resulting in a 7% increase in GDP, four million new employment, and $263 billion in additional deposits.
This promise can only be realized via a strong and efficient Digital Financial Services (DFS) ecosystem, which is why the SBP is concentrating on modernizing lending systems through using technology in payments. The SBP is also working to create a more welcoming regulatory environment for new entrants and to establish new contractual partnerships between financial institutions and third parties.
The funds are designed to assist banks in utilizing technology and innovation to build new or improve current financial products, services, and delivery platforms that will improve SME access to capital.
The goal of this challenge fund is to assist with:
- design and execute creative concepts to help SMEs become more financially integrated;
- design new banking solutions for company owners that are both user-friendly and cost-effective;
utilizing the interoperability option, build and integrate important offers with other stakeholders in the financial system; - build creative methods for facilitating digital access to formal financial services, such as savings, loans, pensions, insurance tools, remittances, and so on
For the latest Business & Tech news, follow on Facebook, and Google News. For the latest news on business & technology