Helping out: Government to give loans to new businesses

SMEs at the forefront of new economic strategy: Dar.

ISLAMABAD: Finance Minister Mohammad Ishaq Dar said on Friday that a new scheme has been introduced in the 2013-14 budget that provides loans to young people to help start their own businesses.

“Under the scheme, loans ranging from Rs100, 000 to Rs2.0 million will be available at a mark up cost of 8%. The remaining cost of mark-up will be borne by the government,” Dar said in a meeting with a delegation from the United States Agency for International Development (USAID) led by Director Gregory C Gottlieb.

Dar also said a sum of Rs2 billion has been earmarked for macro-finance to encourage small businesses. He added that small and medium sized companies have a special place in the strategy being formulated by the present government to revive the country’s economy.

Dar said that during Prime Minister Nawaz Sharif’s previous term, the Board of Investment (BOI) and Small and Medium Enterprises Development Authority (SMEDA) were established to encourage businesses and provide a competitive and healthy business environment. According to the finance minister, those institutions continue to be close to the heart of Prime Minister Nawaz Sharif.

Steps are now being taken to improve those institutions. The government intends to revamp the BOI in order to make it a one window one stop operation for investors.  Similarly, the government intends to reconnect SMEDA with the private sector. According to Dar, institutions like the BOI and SMEDA play a key role in the government strategy of reviving the economy, he added.

Gottlieb affirmed USAID is ready to work with the Government of Pakistan and provide technical support to BOI and SMEDA to enhance the capacity of those organisations. Director John Morgan and economic advisor Komal Bokharey were also part of the USAID delegation. Senior officials from the Ministry of Finance, Economic Affairs Division and Ministry of Industries and Production also attended the meeting.

Published in The Express Tribune, July 20^th, 2013.

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