PESHAWAR, Dec 20: The Khyber Pakhtunkhwa government’s move to help private businesses overcome the negative effects of militancy could not materialise as its Rs200 million credit facility remains unutilised, sources said.

The government, said the knowledgeable sources, released the funds a year ago, but not a single business had applied for the facility, leaving the money lying unused.

“We have not received a single loan application since launch of the credit scheme last year,” said an official of the provincial Bank of Khyber (BoK), responsible to process loan applications and disburse funds to eligible businesses in the province.

The three parties involved in executing the scheme, including the BoK, Khyber Pakhtunkhwa Chamber of Commerce and Industry and members of the business community, when contacted by Dawn on Thursday, held each other responsible for non-utilisation of the credit facility.

The government launched the scheme last year to help small and medium businesses (manufacturers and traders) overcome liquidity crunch, offsetting the negative impact of militancy in line with a KPCCI demand in 2009.

A BoK official said that his institution was not responsible for the failure because it could only process loan applications that would be recommended to it by the chamber.

“The KP chamber has a special committee that would forward the received applications with its recommendations to the bank,” said the official, adding that the chamber had not sent a single loan application so far.

As per the government’s decision, small loans of up to Rs500,000 would be provided to manufacturers whereas traders/shopkeepers would get loans of up to Rs300,000 each depending on their needs.

A KPCCI representative, when contacted, said that the scheme was replete with flaws. He said that mark-up rate was higher than the ratio the chamber had recommended, leaving it unattractive for the business community.

Similarly, the disbursement agency, he added, should have advertised the scheme for information of the business community across the province. He said that the KPCCI members did not show interest in the scheme except for a couple of female entrepreneurs who ascertained information about the facility.

None of the non-KPCCI members approached the chamber even to seek information, said the chamber’s representative. He said that traders and shopkeepers who were not KPCCI members did not know about the government’s initiative.

“On our part, we issued a circular to our members for their information, but beyond that it is not our responsibility to advertise it in the entire province,” said the representative. He said it was BoK’s responsibility to advertise salient features of the credit facility for information of business community.

The BoK official said that the responsibility did not rest with the bank because the scheme was a KPCCI initiative and the duty to spread the word about its launch also rested with the chamber.

Besides, he said the bank was not responsible for the mark up rate because it was a matter between the provincial government and business community.

“The bank has got nothing to do with determining the mark-up rate because it was fixed after a due process of negotiations between the government and KPCCI,” said the banker, adding that the bank would issue the loans in accordance with the Memorandum of Understanding signed between the KPCCI and provincial government.

Sharafat Ali Mubarak, a former KPCCI president, said that the schemes’ shortcomings had harmed small shopkeepers and traders. Industrialists and big businessmen, he added, were not pursuing the matter because they had no interest in its execution.

“They don’t need loans involving half a million rupees liquidity so they are least bothered if the money is lying unutilised with the bank,” he said.

Another KPCCI member said that the blame for failure of the scheme should be directed to the chamber’s leadership because it had not recommended a single application to the bank.

“The stalemate has benefited the bank because it has got a big chunk of money lying unutilised with it for almost over a year, enabling it to make use of it,” said the businessman, requesting anonymity.


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