SBP says aware of SMEs difficulties

Creates teams to address issues faced in availing financing under Rozgar scheme

KARACHI: State Bank of Pakistan (SBP) Governor Reza Baqir has said that so far a total of 1,320 companies have availed the SBP’s refinance scheme and a sum of Rs96 billion has been disbursed to the applicants during April, May and June 2020 under the scheme.

The scheme was launched to limit the adverse impact of Covid-19 on businesses and employment in terms of payment of wages and salaries to the employees.

Exchanging views with presidents of different chambers of commerce from across the country, Baqir said the refinance scheme was launched as a risk-sharing initiative to facilitate small and medium enterprises (SMEs) during the ongoing difficult times and minimise the negative impact on numerous businesses caused by the outbreak of the coronavirus pandemic.

He was of the opinion that meetings via video link with the business and industrial community of Pakistan should be held regularly on a monthly basis so that the SBP could better understand business community’s requirements and accordingly devise strategies.

The governor highlighted that facilitation of the business community was a priority of the central bank, particularly its ongoing measures taken to combat the impact of Covid-19 pandemic.

He briefed the meeting participants about the SBP’s major refinance schemes for payment of wages and salaries to prevent layoffs and the relief package for deferring payment of principal amount and restructuring of loans.

Governor Baqir remarked that though the financing availed by businesses is encouraging so far, SBP is cognizant of the fact that SMEs are facing difficulties in availing this facility from the banks for various reasons.

To address such issues and to facilitate the SME borrowers, Baqir announced an elaborate arrangement of focal persons devised by SBP. These teams will primarily be responsible to address issues faced by businesses in availing the financing under SBP Rozgar scheme in all the cities of the country. He also shared that the central bank was contemplating extending the scheme further as it understands that the businesses are still facing challenges due to impact of Covid-19 on daily lives of common people.

Karachi Chamber of Commerce and Industry (KCCI) President Agha Shahab Ahmed Khan, in his remarks, urged the SBP to publicise details of all the companies who have availed SBP’s refinance scheme with a view to making this scheme transparent otherwise, it is likely that the banks will be accused of giving loans to their favourites and undeserving in future.

He further stated that several public sector organisations, including SBP, have been following dissimilar definitions for SMEs that creates a lot of confusion and needs to be clarified. In response, the governor assured that the issue has been rectified and all the institutions including SBP are following a uniform definition for SMEs which will be shared with KCCI so that they could understand the overall ambit of the SME sector.

The KCCI president added that there is a need to ease the overall criteria and paperwork for loan disbursement so that maximum people could benefit from these facilities in this extremely difficult and extraordinary situation.

“SBP must look into the possibility of launching another refinance facility with zero mark-up, which would certainly provide huge support to the business community in distress,” he added. 

Published in The Express Tribune, June 11^th, 2020.

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