Pakistan directs banks to implement digital solutions for supply chain finance

ISLAMABAD: The Central Bank of Pakistan has issued a directive to banks, instructing them to devise and implement digital solutions for supply chain finance within a six-month timeframe. The aim is to utilise technology to enhance access to finance for small and medium-sized enterprises (SMEs) and to digitise retail payments.

A circular from the State Bank of Pakistan (SBP) has mandated banks to set up an effective Supply Chain Finance (SCF) function, equipped with suitably trained personnel and systems, to develop and offer digital SCF products to SMEs, as stated by the central bank on Tuesday.

Banks have been further counselled to either create their own digital solutions for SCF or collaborate with any Fintech service providers to offer digital SCF. The SBP added, "The digital SCF solutions will not only broaden the access of SMEs to finance but also enhance operational efficiency, lower costs, and fortify risk management practices."

By RSS/Xinhua