The Islamabad Chamber of Commerce and Industries (ICCI) has asked the central bank to provide financing to Small and Medium Enterprises (SMEs) instead of lending hefty amounts to the government for covering its extravagances.
“The banking sector should take measures to strengthen SMEs and the domestic industrial sector to stimulate the growth of trade and industry in the country as SMEs have been playing a key role in providing impetus to economic development,” ICCI President Mahfooz Elahi said in a statement on Saturday.
He said that the government’s borrowing from central and commercial banks touched a record Rs2.99 trillion in fiscal 2011.”On the contrary, our banking sector has been practicing tight loan policy for the private sector, which negatively impacted economic activities that are already hit by bad law and order situation and unavailability of gas and electricity”, he added.
Elahi said that banks credit to SMEs had declined from Rs437 billion in 2007 to Rs334 billion in Dec 2010, showing a huge decline in real terms.
He said that the future of banking industry in Pakistan was critically dependent on the strength and performance of the economy in which SME sector has attained a crucial role.
Published in The Express Tribune, August 7th, 2011.