SBP enhances scope of Covid-related refinance facility

The State Bank of Pakistan (SBP) on Monday expanded to the scope of the Refinance Facility to Combat Covid-19 (RFCC) to allow manufacturers of protective gears and equipment to avail the financing under the facility.

The RFCC, introduced on March 17, 2020 is highly subsidised facility where the SBP provides refinance to banks at 0% whereas banks can keep a maximum margin of 3%. Some of the banks treating this as part of their CSR are keeping margins very low.

“Keeping in view the encouraging response and the potential to help developing the health facilities in the country, SBP has now expanded the scope of this refinance facility further,” the central bank said.

“The scheme now allows manufacturers of protective gears and equipment, including items such as masks, dresses, testing kits, hospital beds, ventilators etc to avail financing under RFCC. Moreover, to cope with the rising needs of the health facilities in general in the country, SBP has allowed hospitals serving patients even other than Covid-19 to avail this facility,” it added.

The refinance facility will be available for setting up or expansion of the existing hospitals, fulfilling minimum specified standards. For setting up new hospitals under this scheme, payments will be released by the banks on completing relevant milestones.

The SBP the RFCC to support the hospitals and health sector for providing services to directly fight against Covid-19. Under this scheme, banks provide concessional loans at a maximum end-user rate of 3% for 5 years for hospitals and medical centers to purchase medical equipment and set up isolation wards for developing capacity and supporting the health sector in fight against Covid-19.

Since its inception in March 17 up till July 2, 2020, Rs 6.4 billion of concessional credit have been approved for hospitals and other eligible facilities to fight Covid-19.