Islamic Banking’s Potential Remains Untapped in Pakistan’s Agriculture and SME Sectors: Banking Industry Sources

The role of Islamic banking financing in Pakistan’s agriculture and small and medium-sized enterprise (SME) sectors is low and remains untapped, according to the country’s banking industry sources.

The sources stated that although 68% of Pakistan’s population is associated with agriculture, Islamic banking only financed 0.52% of the agriculture sector, and emphasized the need for Islamic banking to come up with microfinance facilities. In addition, the sources noted that Islamic banking had only provided financing for up to 3.42% of the SME sector, despite the Government of Pakistan’s strategy to promote SMEs for economic development.

Moreover, the sources h...