LAHORE, Aug 5: The governor approved on Monday a Rs1.2 billion loan scheme to help establish food processing and agriculture related small industries in the Punjab.

He approved the scheme while presiding over a meeting which was attended, among others, by Finance Minister Tariq Hameed, Punjab Small Industries Corporation managing director Nasir Khosa, SMEDA representative Shamon Sadiq, Bank of Punjab managing director Salim Jan and presidents of the chambers of commerce and industry of Lahore, Faisalabad and Gujranwala.

The loans would be extended through the Punjab Small Industries Corporation (PSIC) and also given to the skilled manpower for establishing new industrial units.

Under this scheme exporters would be given loans up to Rs3 million at a markup of 8 per cent.

Governor Khalid Maqbool said the government had stopped the practice of giving loans to the favourites as political bribe and created an atmosphere wherein the national needs could be fulfilled on merit.

He directed that the chambers of commerce and industry concerned should be consulted while providing industrial loans, creating industrial estates and allotting plots in the export processing zones.

LCCI president Dr Khalid Javed Chaudhry expressed his concern over the fact that around 3 million youth were included in the labour force every year but there had been no adequate industrial growth to provide them honourable employment opportunities.

He termed the commercial bank loans given for new investment at 16 per cent markup as discouraging and appreciated the government for taking steps to set up small industries.

Dr Chaudhry also appreciated the government for establishing cluster industries in the province.

The meeting decided that besides advancing loans at 9 per cent markup for the construction of agriculture related factories and repair of their machinery, the PSIC would provide one fourth of the funds allocated for the purpose as working capital loans to such industrialists who had been regularly retiring their loans in the past.

It approved Rs40,000 three-year loan for the owners of cottage industry at the interest rate of 7 per cent. The governor said half of such loans should be given to women artisans and metal etchers should also be included in the scheme. The governor said the PSIC would provide free technical assistance for the preparation of feasibilities of industries to be set up with a minimum Rs500,000 capital. SMEDA and the research and development section of the LCCI would scrutinize every such project before the issuance of the loans, he said.

The governor approved the establishment of export promotion zones in Gujranwala, Faisalabad and Lahore. Plots in the 900-kanal Gujranwala zone would be allotted in consultation with the Gujranwala Chamber of Commerce and Industry. The governor ordered to hold the launching ceremony of the zone on Aug 14.

The meeting decided to speedily complete the development work of the 1,741-kanal export processing zone at Adda Sundar, near Lahore.