PBA backs budget FY26, lauds over Rs1tr circular debt resolution

June 26, 2025 (MLN): The Pakistan Banks Association (PBA) has officially endorsed the Federal Budget 2025–26, outlining major achievements such as the resolution of Rs1.275 trillion in circular debt with no burden on consumers.

This endorsement, coming from the very sector most directly impacted by fiscal and financial decisions, is a powerful validation of the government’s reform direction and approach toward sustainable growth, fiscal consolidation, and inclusive development.

The support reflects confidence not only in the policies announced but also in the spirit of collaboration that has enabled landmark achievements.

The PBA lauded the launch of agri digital loans, providing up to Rs1 million for small farmers under the NSFSI framework.

This initiative underscores the shift toward digital inclusion and rural development, as per the press release issued.

Furthermore, SME financing has increased by 36%, with over 95,000 businesses supported, signaling strong backing for small and medium enterprises as engines of economic growth.

In housing, the sector has thrown its weight behind a 20-year subsidized mortgage scheme, aiming to make housing more affordable for the masses.

Additionally, the budget includes EV financing for electric two- and three-wheelers, specifically targeting women and gig workers, thus aligning with Pakistan’s green transition goals.

Another transformative initiative is the provision of Rs200 billion in youth loans, aimed at promoting youth-led businesses and agri enterprises.

These initiatives collectively demonstrate how banks and DFIs are no longer just lenders, but strategic partners in driving inclusive growth, green transition, SME empowerment, and rural development.

The banking sector’s readiness to lead on these fronts is a tremendous asset for Pakistan’s economic future, and the government looks forward to deepening this public-private partnership for results that matter.