Prime minister unveils SME financing policy
Also launches scheme for promoting home remittances through m-wallets
The SBP governor stated the m-wallet Accounts’ scheme would help to achieve two objectives - increasing financial inclusion in the country and making transfer of home remittances faster and low cost. PHOTO: FILE
KARACHI:
The promotion of small and medium enterprises’ (SMEs) financing can significantly contribute to the economic growth, boost employment and improve livelihoods, said Prime Minister Shahid Khaqan Abbasi.
Launching the State Bank of Pakistan’s (SBP) new SME policy on Friday, he said the policy for the promotion of SME financing would play a pivotal role in developing and promoting a vibrant SME sector in Pakistan. The prime minister was on a three-day visit to Karachi. He said the policy would have a deepening effect on Pakistan’s economy in the shape of SMEs’ contribution to foreign exchange earnings through exports. He voiced hope that the policy would improve financial strength of the under-served SME sector.
Case for a home-grown industrial policy in Pakistan
Abbasi said the pillars identified under the policy appeared focused on addressing specific issues faced by the SME sector and were expected to help in curtailing reluctance of financial institutions to provide financing to SMEs.
“My government fully supports the proposed measures for the promotion of SME financing including the establishment of the Credit Guarantee Company for offering risk sharing to the SMEs and setting up of the Secured Transactions Collateral Registry under the Financial Institutions Secure Transactions Act 2016 by July 1, 2018.”
Speaking on the occasion, SBP Governor Tariq Bajwa highlighted the efforts made by the SBP to facilitate access to finance for the SMEs including the creation of an enabling regulatory framework, market development, awareness and capacity building programmes and introduction of SME financing targets for banks and development financial institutions (DFI) during 2016.
The governor stressed that a separate and comprehensive policy for the SME sector was the need of the hour to promote contribution of the SME sector to inclusive growth.
The governor briefed the prime minister and the participants about nine pillars of the policy which include improvement in regulatory framework, upscaling through microfinance banks, risk mitigation strategy, simplified procedures for SME financing, programme-based lending and value chain financing, capacity building and awareness creation, non-financial advisory services for SMEs through banking channel, leveraging technology for the promotion of SME banking and simplification of taxation regime for SMEs.
Promoting remittances
Separately, the prime minister announced the launch of a scheme for the promotion of home remittances. “The government is taking several strategic initiatives to promote the inflow of home remittances,” said Abbasi.
Addressing the launching ceremony for the ‘Promotion of Home Remittances through M-wallet Accounts’ at the SBP, he said the scheme would help in channelising home remittances through branchless banking channels. “It will help achieve twin objectives,” said Abbasi.
Firstly, it will facilitate the populace through the provision of home remittances in a swift, convenient and cost-effective manner by utilising the network of branchless banking agents. Secondly, it will help enhance the usage of m-wallets and creation of digital accounts.
Abbasi also announced government’s budgetary support to incentivise home remittances through m-wallet accounts.
He said financial inclusion was considered one of the key instruments for economic development. “Unfortunately, Pakistan is among the countries accounting for around 5% of the world’s unbanked population,” he said, adding in Pakistan only 23% of the adult population had access to formal financial services.
Abbasi pointed out that in Pakistan remittances had been the second-highest source of foreign exchange after export receipts. “Over the past 10 years, remittances have grown at a compound annual growth rate (CAGR) of over 12% - one of the highest in the world.”
Auto sector set to make big gains from CPEC
He also appreciated the role of the Pakistan Remittance Initiative (PRI) for a strong growth in remittances.
The SBP governor stated it would help to achieve two objectives - increasing financial inclusion in the country and making transfer of home remittances faster and at low cost, thus competing with informal channels of delivery. Bajwa stated that against the clear challenges of limited financial access, the SBP had been pursuing a long-term strategy to address financial exclusion through branchless banking regulatory and market-development initiatives.
Published in The Express Tribune, December 23rd, 2017.
The promotion of small and medium enterprises’ (SMEs) financing can significantly contribute to the economic growth, boost employment and improve livelihoods, said Prime Minister Shahid Khaqan Abbasi.
Launching the State Bank of Pakistan’s (SBP) new SME policy on Friday, he said the policy for the promotion of SME financing would play a pivotal role in developing and promoting a vibrant SME sector in Pakistan. The prime minister was on a three-day visit to Karachi. He said the policy would have a deepening effect on Pakistan’s economy in the shape of SMEs’ contribution to foreign exchange earnings through exports. He voiced hope that the policy would improve financial strength of the under-served SME sector.
Case for a home-grown industrial policy in Pakistan
Abbasi said the pillars identified under the policy appeared focused on addressing specific issues faced by the SME sector and were expected to help in curtailing reluctance of financial institutions to provide financing to SMEs.
“My government fully supports the proposed measures for the promotion of SME financing including the establishment of the Credit Guarantee Company for offering risk sharing to the SMEs and setting up of the Secured Transactions Collateral Registry under the Financial Institutions Secure Transactions Act 2016 by July 1, 2018.”
Speaking on the occasion, SBP Governor Tariq Bajwa highlighted the efforts made by the SBP to facilitate access to finance for the SMEs including the creation of an enabling regulatory framework, market development, awareness and capacity building programmes and introduction of SME financing targets for banks and development financial institutions (DFI) during 2016.
The governor stressed that a separate and comprehensive policy for the SME sector was the need of the hour to promote contribution of the SME sector to inclusive growth.
The governor briefed the prime minister and the participants about nine pillars of the policy which include improvement in regulatory framework, upscaling through microfinance banks, risk mitigation strategy, simplified procedures for SME financing, programme-based lending and value chain financing, capacity building and awareness creation, non-financial advisory services for SMEs through banking channel, leveraging technology for the promotion of SME banking and simplification of taxation regime for SMEs.
Promoting remittances
Separately, the prime minister announced the launch of a scheme for the promotion of home remittances. “The government is taking several strategic initiatives to promote the inflow of home remittances,” said Abbasi.
Addressing the launching ceremony for the ‘Promotion of Home Remittances through M-wallet Accounts’ at the SBP, he said the scheme would help in channelising home remittances through branchless banking channels. “It will help achieve twin objectives,” said Abbasi.
Firstly, it will facilitate the populace through the provision of home remittances in a swift, convenient and cost-effective manner by utilising the network of branchless banking agents. Secondly, it will help enhance the usage of m-wallets and creation of digital accounts.
Abbasi also announced government’s budgetary support to incentivise home remittances through m-wallet accounts.
He said financial inclusion was considered one of the key instruments for economic development. “Unfortunately, Pakistan is among the countries accounting for around 5% of the world’s unbanked population,” he said, adding in Pakistan only 23% of the adult population had access to formal financial services.
Abbasi pointed out that in Pakistan remittances had been the second-highest source of foreign exchange after export receipts. “Over the past 10 years, remittances have grown at a compound annual growth rate (CAGR) of over 12% - one of the highest in the world.”
Auto sector set to make big gains from CPEC
He also appreciated the role of the Pakistan Remittance Initiative (PRI) for a strong growth in remittances.
The SBP governor stated it would help to achieve two objectives - increasing financial inclusion in the country and making transfer of home remittances faster and at low cost, thus competing with informal channels of delivery. Bajwa stated that against the clear challenges of limited financial access, the SBP had been pursuing a long-term strategy to address financial exclusion through branchless banking regulatory and market-development initiatives.
Published in The Express Tribune, December 23rd, 2017.