KARACHI: The State Bank of Pakistan (SBP) under the banner of Rozgar Scheme will now finance up to 100 per cent of payroll of businesses with an average 3-month wage bill of up to Rs500 million from Rs200m, said a central bank circular issued on Monday.

This can be used for the onward payment of wages and salaries for the months of April, May and June.

The circular also disclosed that up to May 8 banks have so far approved Rs47 billion loan applications to help save 450,000 jobs and they have received requests from over 1,440 businesses for financing of over Rs103bn to support around 1m employees.

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Giving details of financing under the scheme, the SBP said that earlier 100pc financing was available for up to a wage bill of Rs200m only. Similarly, for businesses with a 3-month wage bill exceeding Rs500m, the central bank will now finance up to 75pc with maximum financing of Rs1 billion.

Earlier, 75pc financing was available up to a maximum of Rs375m and 50pc up to Rs500m.

“The above changes are applicable with immediate effect,” said the SBP, adding the businesses that had earlier availed lower funds due to applicable limits can now benefit from additional financing on the basis of revised criteria.

Banks have approved Rs47bn under the scheme

The new changes have been made after constant feedback from the stakeholders to make it more facilitative to businesses, the SBP added.

This increase in financing limits along with the government’s risk-sharing facility for collateral deficient small and medium enterprises and small corporates will enable the full array of businesses to benefit from the SBP’s Rozgar Scheme and hence prevent large-scale layoffs, the statement noted.

Further, the SBP has also extended the availability of its refinance scheme to non-deposit taking financial institutions as well.

They can now draw financing under this for payment of wages and salaries of their employees.

Published in Dawn, May 12th, 2020