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January 10, 2002
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Thursday
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Shawwal 25, 1422
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Govt urged to cut mark-up on long-term loans
By Our Staff Reporter
KARACHI, Jan 9: The president, Lasbela Chamber of Commerce and Industry (LCCI), Maqsood Ismail, has urged the government to reduce mark-up rates on long-term industrial loans to ensure capital formations as well as revival of industrial activity.
In a statement issued on Wednesday, he said that time has come for the government to evolve new soft term policy for disbursement of long-term project loans by banks and DFIs to assist enlarge the role of private sector and attract new investment in the country.
He further said that liberal loans would improve capital markets and infuse much needed liquidity to industries which are generally capital deficient specially in private sector.
In order to make the industrial sector efficient player in the export sector, Maqsood Ismail said a strong financial back up would be needed to resist adverse factors on their working.
He appreciated the government move to set up Small and Medium Enterprises Bank and considered it as a major breakthrough for the growth of SMEs that could prove to be a strong base for large industrial establishments.
He said on the basis of his practical experience in the manufacturing-cum-export business, he can say that at this juncture there is a need of financial institution that could take care of large industrial financing.
Maqsood stressed on the need of diverting a portion of concessional foreign loans being received could be allocated by the State Bank of Pakistan to DFIs and the scheduled banks for disbursement towards urgently needed investment in the private industrial sector at reduced mark-up.
He said such loans should be given on the pattern of export refinancing at a subsidized mark-up not more than 4 to 5 per cent as this would help create strong capital base for industries and in return would boost exports.
He hoped that if these measures are implemented it would usher in higher growth rate and would drastically reduce unemployment with the improvement in cost efficiency of industrial units.
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