Narratives of SMEs on Access to Finance: Barriers and Opportunities in Pakistan’s Banking Sector

Small and medium enterprises (SMEs) are at the centre stage of the Pakistani economy, but the lack of access to finance limits the growth of these enterprises. This study investigated SME stories to critically analyse the obstacles and opportunities in the banking sector of Pakistan. A qualitative design was applied, and ten SME owners in various industries were interviewed using semi-structured interviews. Thematic analysis was used to analyse the data to obtain the lived experience of the entrepreneurs working in the financial landscape. The results reported five major themes: stringent collateral requirements and risk perceptions of banks, low financial literacy, institutional barriers and bureaucratic inefficiency, dependence on informal financing, and new opportunities of digital finance and government-supported initiatives. Respondents repeatedly stressed the limiting aspect of conventional banking, which discriminated against smaller firms that do not have fixed assets. Nevertheless, other channels, including microfinance institutions, fintech solutions, and specific credit guarantees, were viewed as promising ways to increase financial inclusion. The study is a contribution to the literature because it puts the SME voices in the centre of the study and provides context-specific information in policy and practice. There are practical recommendations that point to the necessity of collateral alternatives, simplified banking processes, financial literacy programs, and enhanced integration of online platforms. The differences in access to finance between sectors and gender should be studied in the future.