PESHAWAR, Jan 24: Trade and business circles of Peshawar observed on Thursday that high lending rate in addition to tough collateral restrictions and procedural bottlenecks would hamper the small and medium entrepreneurs of NWFP to take advantage of the newly-set up SME Bank.

In a meeting with SME Bank president Kaiser Hanif Naseem here, members of the Sarhad Chamber of Commerce and Industry (SCCI) asked him to reduce the mark-up ratio, simplify procedures for loans in addition to easing restrictions specially the ratio of collateral required to qualify for loans.

Conceding the reservations expressed by the SCCI members, Kaiser Hanif sought recommendations from the trade body and explained in details the objectives and priorities of the SME Bank.

Acknowledging the observations and demands raised by the SCCI members, particularly small traders and representatives of shopkeepers, Kaiser Hanif said the procedural complications and bottlenecks involved at the time of filing loans application had already been eased and would be softened further as the new entity made progress.

Sharing the lending programme of his bank, Kaiser Hanif said that SME Bank had eyed at extending Rs1 billion loan by the close of the current year and Rs4 to Rs5 billion over the next four five years.

So far, according to him, the Bank had already extended about Rs135 million across the country involving some Rs30 to Rs 35 million in NWFP.

Apart from extending loans, the SME Bank would also extend technical and market related business assistance to the intending parties who would apply for loans.

“Not only that we would extend financial assistance, our bank would facilitate business in terms of basic information about various businesses and market trends,” he added.

Though he conceded that lending rate fixed by the SME Bank were at the higher side in comparison with the mark-up ratio internationally, the bank could hardly do any control over that as it had to fix its lending rates at a level over and above the prevailing discount rate of the State Bank.

The SME Bank president said the bank was working details of an Islamic lending product.