LAHORE: State Bank of Pakistan (SBP) Governor Dr Reza Baqir on Tuesday reassured the business community of facilitation of priority sectors, including agriculture, small and medium enterprises (SMEs), housing and exports.

He was speaking at the cheque distribution ceremony held at the Multan Chamber of Commerce and Industry (MCCI) to mark disbursement of the first set of loans by Meezan Bank under SME Asaan Finance (SAAF) scheme.

About the various initiatives of SBP to facilitate businesses, particularly SMEs, Governor Baqir said Aasan Finance scheme would be a game changer in enhancing SMEs’ access to finance as it would address long outstanding challenge of lack of collateral faced by SMEs.

He thanked MCCI President Khawaja Mohammad Hussain for inviting him to visit MCCI and spoke about significance of SMEs in Pakistan against what they were getting in terms of access to finance, some of the initiatives SBP had taken to promote SME finance and potential role of SAAF scheme in near future.

Says Aasan Finance scheme will be game changer in enhancing SMEs’ access to finance

Dr Baqir highlighted that with the objective of stimulating sustainable economic growth in the country, various initiatives had been taken to facilitate the business community, including introduction of a unique collateral-free loan scheme for SMEs -- Asaan Finance scheme, SBP’s concessionary refinance schemes for different sectors, measures taken to combat the Covid-19 effects, digitisation of banking systems and convincing banks to enhance financing to business community, especially priority sectors.

Dr Baqir also met businessmen of the region and listened to their views. During the meeting, he said that Covid-19 pandemic was an unprecedented catastrophe that affected economic life of individuals and businesses at national and international level.

He highlighted that the proactive policy response by SBP during Covid-19 pandemic, especially refinance schemes i.e. TERF and Rozgar, not only provided breathing space to employees of businessmen, but also laid down sound foundations for medium to long term industrialisation in the country.

Traversing on another theme, the governor said SBP was working rigorously on the implementation of the government’s Mera Pakistan Mera Ghar (MPMG) scheme to provide affordable housing to masses.

He said the facility would help individuals, who were constructing or buying a new house for the first time, to avail bank’s financing at subsidised and affordable mark-up rates.

He said various measures had been taken to make the regulatory environment more conducive for the growth of housing sector. “A complaint resolution mechanism is also available through an online complaint management system for MPMG from January 2021.”

He urged MCCI could play an active role in creating awareness among employees of its members to avail financing under MPMG.

He also assured of the support of the central for the business community and asked them to continue playing their effective role in economic growth of the country.

The SBP governor encouraged MCCI members, entrepreneurs and SMEs to avail maximum benefit from the SAAF scheme to set up and upgrade their business facilities. “Bridging a major gap, SAAF provides an avenue for SMEs to secure collateral-free financing from banks, thereby increasing their financial inclusion.”

Under the scheme, SMEs can avail collateral-free financing of up to Rs10 million at the concessionary end-user rate of up to 9 per cent markup to meet their long-term capital expenditure and short-term working capital needs.

He said the scheme would offer reasonable spread to banks to enable them to invest in their processes, systems, human resources and technology so that when the SAAF scheme concluded, banks were able to continue collateral-free financing on a sustainable basis.

SAAF is a unique facility wherein refinance is provided by SBP while risk coverage of up to 60 per cent is provided by the government.

Published in Dawn, December 22nd, 2021