SMEDA partners with LSE, University of Chicago for SME lending study

LAHORE: The Small and Medium Enterprises Development Authority (SMEDA) has partnered with the Lahore School of Economics (LSE) and the University of Chicago to research SME finance and lending in Pakistan under its Research, Regulatory Insight & Advocacy Assistance (RRI&A) for SMEs Project.

The study aims to explore the reasons behind SMEs’ low uptake of formal bank loans, examining factors such as managerial preferences, search frictions and informal screening by loan officers. It will also assess ways to improve application support and build trust between SMEs and lenders. A national survey has been launched as the first step.

SMEDA CEO Socrat Aman Rana said the initiative supports SMEDA’s mission to improve SMEs’ access to finance, vital for economic growth. Dr Hamna Ahmad, associate professor at LSE, highlighted the importance of bridging academia and industry, while Emma Zhang, a PhD candidate at the University of Chicago Booth School of Business, emphasised the collaboration’s goal to inform SME financing policy with data-driven insights.

General Manager Policy Planning at SMEDA and Project Director of RRI&A Nadia Jahangir Seth said the findings would help design customised lending programmes and capacity-building initiatives. SMEs are encouraged to complete the survey available on SMEDA and RRI&A websites and social media platforms.

The initiative forms part of SMEDA’s wider efforts to enhance SME bankability, improve financial literacy, and promote policies that support SME integration into the formal financial system.