Banks to provide SMEs access to finance

Small businesses to be assisted in energy-efficient production.

KARACHI:

The State Bank of Pakistan (SBP), commercial banks and SCI-Pak have decided to jointly develop an energy and resource-efficient network and address financial needs of small and medium enterprises (SMEs).

This consensus was reached at a meeting, organised by SBP and European Commission-funded SCI-Pak project in Karachi and chaired by Mohammad Mansoor Ali, Director Infrastructure Housing and SME Finance Department of SBP. The purpose of the meeting was to identify strategies to foster communications and interaction between SBP, financial institutions and SMEs in facilitating access to finance for small businesses in order to undertake energy and resource-efficient production.

The three parties will also launch awareness campaigns for SMEs at grass-roots level to educate people about different financial instruments developed by the central bank for the modernisation of SMEs.

Mansoor Ali observed “although SMEs are typically vulnerable to economic downturns, yet given their importance to the country’s growth and employment prospects, we have to ensure and encourage continued access to finance for SMEs.”

He said SBP had unveiled a number of initiatives to encourage lending to the sector, which included establishment of a credit guarantee scheme and a concessionary refinance scheme for modernisation of SMEs, revision of regulatory framework for financing, conducting SME cluster surveys and financial awareness programmes.

However, he emphasised that for sustainability of any initiative, there should be a strong commitment on part of both the financial institutions and business associations.

Representative of SCI-Pak, a project for promoting sustainable and cleaner production in manufacturing industries of Pakistan, Omar Malik said energy and resource efficiency was a measure to reduce consumption of energy and resources and to minimise creation of waste and greenhouse gas emissions while at the same time strengthening the SMEs economic performance and competitiveness through cost reductions.



Published in The Express Tribune, June 16th, 2011.