Tag: SME financing

KARACHI: State Bank of Pakistan (SBP) on Tuesday launches a concessionary Small Enterprise Financing and Credit Guarantee Facility for special persons.

Tariq Bajwa, SBP, governor announced this special facility in the 7th meeting of the National Assembly Standing Committee on Finance, Revenue and Economic Affairs held at State Bank of Pakistan.

Members of the Standing Committee and senior executives of State Bank of Pakistan were also present on the occasion.

“Realizing the vulnerability of persons with disabilities in the country and cost associated with their exclusion for the economy, SBP in-line with its priority sector development has devised a scheme for special persons”, said Tariq Bajwa.

This financing facility is expected to improve access to finance for special persons falling under Small Enterprise (SE) category at a concessional rate of 5 percent per annum.

Under the scheme, banks and DFIs will provide financing facilities to special persons for establishing new business enterprises or for expansion of existing businesses.

The SBP will provide refinance to banks/ DFIs up to 100 percent of finance extended by them.

Special persons can avail financing up to Rs1.5 million for a maximum period of 5 years including grace period of 6 months.

SBP will also provide risk coverage of 60 percent to banks/DFIs on their outstanding loans under the scheme. This financing facility has been issued with the main objective of improving the socio-economic life of special persons in Pakistan.

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SBP launches three Sharia compliant refinancing schemes for SMEs

KARACHI: State Bank of Pakistan (SBP) has issued three Shariah Compliant Refinance Schemes that are expected to provide level playing field to the Islamic banking industry, a statement said on Friday.

Currently, SBP offers various subsidized refinance facilities to the banks / DFIs to channelise the funds into priority sectors.

It is worth mentioning here that Shariah compliant Islamic Export Refinance facility and Islamic long term financing facility for the exporters are available to the Islamic banking industry.

However, addition of Shariah compliant financing facility for Renewable Energy, financing facility for storage of agricultural produce and Refinance facility for modernization of SMEs will meet the long awaited demand of the industry, especially for the Agriculture and SME sectors.

Mudarabah based facilities would provide long term cheaper liquidity to the end users. The financing under Islamic financing facility for Renewable Energy will be available in two categories.

These are (i)prospective sponsors desirous of setting up renewable energy power projects with capacity ranging between 1 – 50 MW and (ii) consumers willing to install facility using renewable energy source for generation of electricity ranging between 4 KW – 1 MW for own use and/or for supplying to the distribution company.

Islamic Financing facility for storage of agricultural produce will be available for setting up silos, warehouses and cold storages. Refinance facility for modernization of SMEs will be available for purchase of new imported/ local plant & machinery for SMEs.

KARACHI: State Bank of Pakistan (SBP) on Tuesday said that SME financing by banks has first time crossed the milestone of Rs500 billion.

SME financing was recorded at Rs 513 billion at the end of CY 2018 compared to Rs 450 billion in the corresponding period last year, exhibiting growth of 14 percent.

The growth in SME financing was even more prominent in the last six months of CY 2018 (July-Dec, 2018) wherein it registered an increase of 25 percent.

This increase in SME financing attracts greater significance keeping in view the fact that SBP policy rate during CY 2018 witnessed a rising trend.

Due to continued focus of State Bank for facilitating SMEs access to formal sources of finance, SME financing increased significantly during CY 2018.

The substantial increase in SME financing is mainly attributable to implementation of the policy for promotion of SME finance issued by the State Bank of Pakistan in December 2017.

The SME policy ensured provision of enabling regulatory environment for SME finance, prescribing SME financing targets for banks/DFIs, sensitizing banks to adopt SME financing as a viable business proposition, advising banks to provide non-financial advisory services for making SMEs bankable, simplifying procedures for SME financing and introduction of new SBP refinance schemes for SMEs through banks/DFIs.

Under the policy so far more than 2,500 bankers have been trained through focused trainings by the training institute of the central bank.

Similarly, awareness has also been created among more than 20,000 stakeholders including SMEs through special programs held by SBP and SBP BSC all across the country.

The impact of SBP interventions resulted into significant rise in outstanding SME finance by banks/DFIs coupled with 2.3 percent decrease in non-performing SME portfolio of banks over last year.

It is pertinent to mention that Government of Pakistan is also providing all out support to promote SME sector.

The substantial tax incentives to the banks on their incremental financing to SMEs announced in recent economic reforms bill is in line with measures identified in government’s 100-day agenda for development of SME sector.

This will continue to encourage banks to fulfill the financing needs of SMEs.

It is worth mentioning that SME sector is contributing 30 percent towards country’s GDP, employ more than 80 percent of non-agricultural workforce and generate 25 percent in export earnings. Thus, SME sector has huge potential for employment generation and poverty alleviation.