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Banks’ refinancing spreads raised

Updated May 20, 2017 07:46am


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KARACHI: The State Bank of Pakistan (SBP) increased on Friday the spread of banks and development finance institutions (DFIs) on the refinance facility for the modernisation of small and medium enterprises (SMEs) and the Financing Facility for Storage of Agricultural Produce (FFSAP).

An SBP circular said that to encourage banks and DFIs to use these facilities for promoting the flow of long-term financing to SMEs, it has been decided that the rates of service charges for banks/DFIs and rates for end-users for loans up to 10 years will be four per cent and 6pc, respectively, effective June 1.

Earlier, spreads of banks and DFIs were smaller than the new rates while the rate for end-users was the same.

“It has been observed that banks/DFIs do not effectively contribute to the proper dissemination/awareness creation of the above schemes among potential customers,” said the SBP circular.

Published in Dawn, May 20th, 2017


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Comments (1)

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mstareen May 21, 2017 06:00am

We have pathetic banking system. No bank is ready to actually invest with SME as banks are already earning huge sums of money under protective regime of State bank of pakistan. Banks only lend to the businesses which are being run by elite class only. No common man can secure financing for establishing small new business.