SBP launches challenge fund for SMEs State Bank of Pakistan

SBP launches challenge fund for SMEs

KARACHI: The State Bank of Pakistan (SBP) on Monday March 21, 2022, launched challenge fund for Small and Medium Enterprises (SMEs) to support innovative solutions for SME banking in the country.

The central bank through a circular issued procedure for the challenge fund for SMEs (CFS).

This fund in form of grant will facilitate banks in developing innovative technological solutions to cater the banking needs of SME sector.

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This will also enable to increase the access and usage of digital financial services by SME sector.

The scope of CFS will focus, however, it will not be limited to the following areas:

i. Developing SME banking solutions

ii. Developing digital payment solutions for SMEs

iii. Developing E-Commerce / market place

iv. Digitizing loans application and credit management

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The SBP said that commercial banks (conventional & Islamic) are eligible to apply for grant under CFS. Banks can also apply in partnership with Non-banking financial Institutions (NBFIs), Fintechs, Electronic Money Institutions (EMI) and software houses. However, lead responsibility will rest with the applicant bank.

The SBP said that grant size will be determined according to the financing requirements of the proposal under consideration. However, each grantee will contribute 15 per cent of the total cost. Depending upon the quality and innovations of proposal, the grant size can vary, however one bank will get only one grant. The duration of the projects to be implemented through CFS grant should not exceed 8 months.

SBP invites interest of banks through Expression of interest (EOI) placed at Annexure A for availing grant under CFS to improve their SME financing portfolio. Banks proposals will be evaluated as per technical criteria developed by SBP.

Banks are encouraged to apply as per EOI on prescribed format placed at Annexure-B to SBP latest by April 18, 2022.