LAHORE, Oct 24: State Bank Governor Dr Ishrat Hussain has said that the new set of financial regulations for the small and medium enterprises sector had been prepared and would be announced soon.

He was speaking as a chief guest at a seminar on “Issues in SME financing” organised by the SMEDA and the Institute of Bankers Pakistan at a hotel here on Friday. He said that the new regulations would substantially improve financing of the small and medium enterprises in the country.

He said that like the great improvement in the financing of the agriculture sector, the state bank would like that small and medium enterprises financing should be improved.

He said that by involving the commercial banks in the agricultural credit, the amount of the agricultural loans advanced to the farmers had increased from Rs5 billion in 1999-2000 to Rs 22 billion in 2002-2003.

He said that there was a great scope for the development of SMEs in the country. He asked the bankers not to confine their financial activities to the main cities and move to the interior where there was a great demand for SME finance.

He said that in small towns there was a large number of small industries which could be developed further if they were given proper financial support.

APP adds: Ishrat said that preferential mark-up rates for a particular sector had never been useful. Rather, these were misused by affluent elements in past in the name of poor, he added.

He referred to Agricultural Development Bank of Pakistan’s loans which were borrowed by the landlords at thee per cent in the name of their tillers.

Responding to a question, he said that SBP would not issue any BPD-29 like circular to bail out the textile millers affected by recent hike in the cotton prices.

On agriculture loans, Dr. Ishrat Hussain hoped that these would touch the mark of Rs 100 billion in the next two years.

Due to the government policy to engage all the stake holders in the consultative process, the commercial banks had increased agriculture loans to Rs 22 billion during the year 2002-03 from the level of Rs 5 billion in 1999-2000, he said. SME Bank president Mansoor Khan, Executive Vice President of Prime Bank Hamid M. Imtiazi, Country Head, SME Group, Union Bank, Talha Saeed, Chief Executive Officer, SMEDA, Shahab Khawaja and IBP (Lahore Chapter) chairman Sohrab Abbasi were also present on the occasion.