SBP launches refinance, credit guarantee scheme for women entrepreneurs

KARACHI: State Bank of Pakistan (SBP) on Thursday launched refinance and credit guarantee scheme for women entrepreneurs in order to support and revive economic activities in the country.

The SBP said that the financing would be available to women entrepreneurs across the country for a period of up to 5 years, including maximum grace period of up to six months.

The maximum financing limit under the scheme will be Rs 1.5 million. The financing under the scheme should be provided for setting up of new business enterprises or for expansion of existing ones.

The SBP said that financing under the scheme should be provided to women borrowers preferably under the personal guarantee of the borrower.

The central bank said that as per the government’s policy to support and revive economic activities in the country and SBP’s measures for improving access to finance for the women entrepreneurs, a refinance cum credit guarantee scheme is being launched for the women borrowers across the country.

Under the scheme, banks and DFIs will be required to provide financing facilities to women entrepreneurs to meet credit needs of their businesses.

Under the scheme, refinancing will be provided by SBP at zero percent to participating financial institutions for onward lending to women entrepreneurs across the country at a mark-up rate of up to 5 percent per annum.

Such loans will also be eligible for 60 percent risk coverage under SBP’s Credit Guarantee Scheme for Small and Rural Enterprises.

The SBP said that it would allocate limits to PFIs under the scheme on receipt of request from them. The limits will be reviewed on yearly basis.

At least 20 percent of the limit should be allocated for lending to women entrepreneurs in Balochistan.

Applications for sanction of limits shall be sent by the interested banks/DFIs to the Director, Infrastructure, Housing & SME Finance Department.

The SBP said that repayment of loans by borrowers shall be made in equal quarterly installments after grace period (if any). The refinance granted by SBP BSC offices to the PFIs shall be recovered, on the due dates as reported in the original repayment schedule, from the accounts of the PFIs maintained with the respective office of the SBP BSC.

If a borrower repays the loan amount or its installment, in part or in full, before the due date(s), the PFIs shall be under obligation to repay the amount(s) so received within 15 days to the concerned office of SBP BSC failing which, fine for late adjustment of loan will be recovered from the concerned bank/DFI, at the rate of Paisa 60 per day per Rs 1,000 or part thereof or prospectively at such rate as may be announced by the State Bank from time to time.

In case a borrower fails to repay the amount of installment as per the original repayment schedule, the PFIs will be entitled to charge normal rate of mark up on such overdue principal amount besides taking other actions to recover the same as are incidental to such defaults.

The SBP will continue to recover the principal amount on the due dates as per the repayment schedule.

In no case, the liability of banks/DFIs to pay/repay to SBP BSC the principal amount of refinance as per the repayment schedule or mark-up or any other charges or penalty thereon shall be dependent upon the recovery from the borrower nor shall such liability be affected by any default on the part of the borrower.

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