The Ministry of Finance and Karandaaz on Friday launched Pakistan’s first special credit guarantee company, namely National Credit Guarantee Company Limited (NCGCL), with the objective of providing financial assistance to small and medium-sized enterprises.
The inauguration ceremony was attended by representatives from the British High Commission, Association of Chartered Certified Accountants (ACCA), State Bank of Pakistan and Ministry of Finance. NCGCL will help enhance financial accessibility through special credit guarantee facilities with a particular focus on expanding financial outreach for businesses operating at small and medium scales.
Speaking on the occasion, Federal Minister for Finance, Revenue and Economic Affairs Dr Shamshad Akhtar, while highlighting the significance of the credit guarantee firm, called it a revolutionary initiative.
She pointed out that private-sector credit for SMEs in Pakistan stood at a mere 5.2%, declining from 7.7% in the last five years.
Read K-P youth, SMEs to receive soft loans
She described the credit level as significantly lower when compared with other South Asian nations, which had an average of over 17%. “Undoubtedly, they do better in exports and competitiveness.”
Akhtar stressed that the reality was that the SMEs accounted for 90% of formally registered businesses, contributed around 40% of GDP and employed 80% of non-agricultural workforce, offering an opportunity to the low income strata of society.
The minister was of the view that inadequate investment in the SME sector, globally recognised as the one that enhanced competitiveness of countries and industries, opted for value addition and generated employment, hindered Pakistan’s sustainable growth and development.
Terming the launch of NCGCL a far-reaching institutional reform, she emphasised that the purpose was to facilitate smooth capital investment in small businesses.
Speaking on the occasion, British High Commissioner Jane Marriott said initial investment of Rs6 billion had been made in the company under the financial inclusion programme.
Published in The Express Tribune, January 13th, 2024.
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