State Bank of Pakistan mandates digital solutions for Supply Chain Finance

The State Bank of Pakistan (SBP) has issued a directive to all banks to develop and implement digital solutions for Supply Chain Finance (SCF) within a six-month period. This move is aimed at leveraging technology to improve Small and Medium Enterprises' (SMEs) access to finance and streamline retail payments by transitioning to digital platforms.

According to the circular released by the SBP, banks are required to establish a robust Supply Chain Finance function staffed with well-trained personnel and equipped with efficient systems to design and provide digital SCF products tailored for SMEs. Banks are also advised to either create their own digital SCF solutions or partner with financial technology (fintech) service providers to deliver digital SCF services. The adoption of digital SCF solutions is anticipated to not only simplify SMEs' access to finance but also boost operational efficiency, cut down costs, and strengthen risk management protocols.

The State Bank of Pakistan's directive to banks to implement digital solutions for Supply Chain Finance signifies a significant step towards modernizing financial services and supporting the growth of SMEs in the country. By embracing digital SCF solutions, banks can enhance financial inclusion, improve efficiency, and mitigate risks, ultimately fostering a more robust and resilient financial ecosystem.