Small, medium units on brink of default

ICCI demands bailout package for virus-hit SMEs

ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has called on the government to finalise a bailout package for coronavirus-hit small and medium enterprises (SMEs) at the earliest in order to save them from default and extinction.

In a statement on Wednesday, ICCI President Muhammad Ahmed Waheed said business and industrial firms had ceased operations for the past one month in the wake of Covid-19 and business activities had been devastated.

He urged the government to finalise a rescue package for the SMEs as early as possible because these businesses had pinned their hopes on the country’s leadership and expected relief measures due to the current situation.

“Owing to the closure of industries, workers are without work and industrialists are meeting their day-to-day food needs,” he pointed out. “The due date for paying commercial and industrial utility bills is approaching and if the lockdown continues for a long time, many SMEs will default.”

The chamber president added that due to the coronavirus pandemic, many countries had announced relief packages for the SMEs but the government of Pakistan had not been able to provide any relief.

Terming SMEs the backbone of economy, he stressed that the government should announce a bailout package on a priority basis in a bid to ease their problems.

He lauded the State Bank of Pakistan for enhancing the regulatory limit on credit extension to the SMEs, but emphasised that banks’ mark-up on loans should be brought down to below 5% so small units could acquire easy credit for reviving business activities.

“SMEs have obtained loans from banks for expansion and new investment,” he said, adding “the government should defer such loans with mark-up for three to six months and allow borrowers to repay in easy installments, which will reduce their difficulties.”

Published in The Express Tribune, April 9^th, 2020.

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