SMED Circular No. 11 (prudential regulations for commercial banks to undertake microfinance business)

Pakistan

(enacted in 2006)

Prudential regulations for commercial banks to undertake microfinance business issued under SMED Circular No. 11 by the State Bank of Pakistan to provides a regulatory framework for establishing microfinance banks. 

The circular is organized as follows: 

  • Part A Prudential Regulations for Micro Finance operations under Mode I & II including:
    • Maximum loan sizes; 
    • Maximum exposure of borrowers; 
    • Classification and restructuring of of loans; and
    • Pricing of microfinance products and operational services.
  • Part B Prudential Regulations for Micro Finance operations under Mode IV including:
    • Personal guarantees;
    • Securities; and
    • minimum conditions for taking exposure.