PBA Endorses FY25-26 Budget for Growth

Karachi, June 25, 2025 — The Pakistan Banks Association (PBA) on Wednesday threw its full support behind the FY2025–26 federal budget, hailing it as a bold step toward inclusive growth, sectoral reform, and long-term economic stability, per a statement. The PBA praised the federal government’s fiscal alignment with structural transformation, spotlighting the banking sector’s pivotal role alongside the Ministry of Finance, State Bank of Pakistan (SBP), and stakeholders.

A landmark achievement is the Rs1.275 trillion circular debt resolution, a complex financing feat coordinated with SBP and the Central Power Purchasing Agency (CPPA), easing regulatory hurdles and financial issues. The PBA claims this cashflow-backed solution will stabilise the power sector, cut tariffs, and minimise consumer burden. The National Subsistence Farmers Support Initiative (NSFSI) offers digital loans up to Rs1 million for smallholder farmers, tied to agri-inputs via digital wallets, backed by agri-advisory and an Electronic Warehouse Receipt (eWhR) system.

The SME sector thrives with the SBP-led SME Risk Coverage Scheme, disbursing Rs311 billion to 95,000+ businesses, with SME lending up 36% to Rs641 billion and beneficiaries up 51%, targeting Rs1.1 trillion by 2028. A government-subsidised mortgage program offers 20-year loans for low- and middle-income homes, aiming to lift the mortgage-to-GDP ratio from 0.3% to 5% by 2030. Green mobility gains a financing scheme for electric two- and three-wheelers for gig workers, women, and small businesses, cutting emissions and costs.

The PBA also announced Pakistan’s first Skills Impact Bond (PSIB) with the British Asian Trust, introducing outcome-based financing for technical education, linking funds to employment outcomes. PBA Chairman Zafar Masud hailed these reforms as a strategic shift for the banking sector, vowing public-private collaboration and innovation.

Web context notes Pakistan’s banking growth (e.g., 15% credit rise, web ID: 0), while posts found on X show optimism—some back initiatives, others question execution. Critically, the narrative of “economic stability” may mask debt risks—web data hints at power sector fragility, and X sentiment suggests distrust in sustained impact, pointing to underlying challenges.