Sindh collaborates with banks to finance agri-based SMEs
Move aims to encourage use of modern technology in agriculture
A Reuters file photo of an agricultural field.
KARACHI:
The Sindh Enterprise Development Fund (SEDF) has collaborated with five banks to provide subsidised financing to agriculture-based small and medium enterprises (SMEs).
In a ceremony held on Tuesday, SEDF, a subsidiary of Investment Department Sindh, signed agreements with Bank Alfalah, Askari Bank, Meezan Bank, JS Bank and Al Baraka to facilitate agriculture related SMEs.
According to the agreement, SEDF will pay interest to banks on account of loans granted to SMEs based on the Karachi Interbank Offered Rate (Kibor). SEDF has offered interest rate subsidy at 100% Kibor of the capital cost and 50% Kibor of working capital to selected individuals who are found capable of setting up agri-business projects and can apply for a loan for a period of three years.
However, the total monetary value of the SEDF interest subsidy shall not exceed Rs50 million and SEDF financial support shall not exceed projects valuing Rs200 million.
“The Sindh government is making efforts to assist people associated with the agricultural sector in a bid to promote the use of modern technology,” said Mohammad Usman Chachar, Chairman of Inspection Team of Sindh Chief Minister while talking at the ceremony. “Previously, it was believed that population was multiplying while resources were limited and eventually, the population would outnumber the available resources.”
However, he added that technology has proved the theory wrong by providing exponential growth in agriculture therefore, the department wanted to support these innovations.
He added that the Sindh government had always taken a lead in such initiatives but for some reason, it was unable to materialise the initiatives and reap desired results, stressing that there was a need to identify the issue.
“We provide this facility to those who are bringing some innovation and modernisation in agriculture sector, which is lagging behind,” SEDF Managing Director Mehboob ul Haq told The Express Tribune. “Previously, we gave the subsidy to similar business through a cumbersome process only to find out that banks had rejected loans to selected applicants, hence we decided to ink an agreement with banks to streamline the issue.”
Now, he added, the banks would review the applicant’s case and if they agree to grant the loan, they would forward the case to SEDF which will in turn inform the bank within seven days whether the case falls under its criteria or not.
Speaking on the occasion, farmer Muhammad Khan Sumejo said, “Every bank has different criteria with plethora of conditions to issue loans, which is a hurdle in the way of getting swift loans.”
Published in The Express Tribune, November 6th, 2019.
The Sindh Enterprise Development Fund (SEDF) has collaborated with five banks to provide subsidised financing to agriculture-based small and medium enterprises (SMEs).
In a ceremony held on Tuesday, SEDF, a subsidiary of Investment Department Sindh, signed agreements with Bank Alfalah, Askari Bank, Meezan Bank, JS Bank and Al Baraka to facilitate agriculture related SMEs.
According to the agreement, SEDF will pay interest to banks on account of loans granted to SMEs based on the Karachi Interbank Offered Rate (Kibor). SEDF has offered interest rate subsidy at 100% Kibor of the capital cost and 50% Kibor of working capital to selected individuals who are found capable of setting up agri-business projects and can apply for a loan for a period of three years.
However, the total monetary value of the SEDF interest subsidy shall not exceed Rs50 million and SEDF financial support shall not exceed projects valuing Rs200 million.
“The Sindh government is making efforts to assist people associated with the agricultural sector in a bid to promote the use of modern technology,” said Mohammad Usman Chachar, Chairman of Inspection Team of Sindh Chief Minister while talking at the ceremony. “Previously, it was believed that population was multiplying while resources were limited and eventually, the population would outnumber the available resources.”
However, he added that technology has proved the theory wrong by providing exponential growth in agriculture therefore, the department wanted to support these innovations.
He added that the Sindh government had always taken a lead in such initiatives but for some reason, it was unable to materialise the initiatives and reap desired results, stressing that there was a need to identify the issue.
“We provide this facility to those who are bringing some innovation and modernisation in agriculture sector, which is lagging behind,” SEDF Managing Director Mehboob ul Haq told The Express Tribune. “Previously, we gave the subsidy to similar business through a cumbersome process only to find out that banks had rejected loans to selected applicants, hence we decided to ink an agreement with banks to streamline the issue.”
Now, he added, the banks would review the applicant’s case and if they agree to grant the loan, they would forward the case to SEDF which will in turn inform the bank within seven days whether the case falls under its criteria or not.
Speaking on the occasion, farmer Muhammad Khan Sumejo said, “Every bank has different criteria with plethora of conditions to issue loans, which is a hurdle in the way of getting swift loans.”
Published in The Express Tribune, November 6th, 2019.