KARACHI, July 10: The Union of Small and Medium Enterprises (Unisame) has claimed that the Export Refinance Facility (ERF) is being used for speculative and non-productive economic activities.

In a statement issued to the press on Monday, Unisame President Zulfikar Thaver pointed out that the finance obtained at the concessional rate under the ERF was used for speculation in the stock market, property transactions, foreign exchange purchases, hoarding of general merchandise and motor vehicles.

These activities, he said, were causing unnecessary disturbance in smooth functioning of the economy, resulting in increase in prices and creating artificial shortage of essential commodities.

Unisame consultants, he said, had advised the SBP to either abolish the facility or impose heavy penalty and strict checking to discourage this malpractice. The consultants pointed out that items like sugar, wheat, rice, pulses and spices were hoarded by the merchants and released very slowly at exorbitant rates.

“The government should ensure that the subsidised finance provided to the exporters is used for exports and not for hoarding commodities,” they said, urging the SBP to lower the mark-up rate on finance facility to the SME sector.