ISLAMABAD, May 28: The Asian Development Bank (ADB) will extend 100 million dollars to Small and Medium Enterprise (SME) Bank for capacity-building and strengthening loaning to the SMEs in the country.

“The ADB has so far disbursed 20 million dollars grant for SME Bank and the Small and Medium Enterprises Authority (SMEDA) and now my Bank is hoping to shortly receive 100 million dollar to be essentially used for capacity building,” said the President of SME Bank, Kaiser Naseem.

He told Dawn here on Tuesday that his Bank was extending small and medium loans to help promote the small and medium enterprises. “We have extended Rs300 million to about 600 SMEs,” he added.

Mr. Naseem said that the major objective was to develop institutional building so that the SME Bank could continue offering increasing number of loans to the deserving SMEs.

Responding to a question he said that he foresaw a greater economic activity once the government removed various irritants that were causing various problems to the investors. He said that the government itself was aware of these irritants that was why it had created a high-level cabinet committee on de-regulation. The president of the SME Bank expressed the hope that the government will be able to remove the genuine complaints of the businessmen specially those relating to the SMEs. He said Finance Minister Shaukat Aziz himself was on record having said that genuine difficulties of the business community would adequately be removed in the next budget.

The officials of the ministry of finance were saying that there was no denying the fact that without ensuring infrastructure facilities such as telephone, gas, electricity, water, etc., it will be difficult to convince the private sector to invest in the country. They admitted that labour and social security departments were also discouraging investors by seeking bribe every now and then.

They said that since SMEs provide 60 to 65 per cent employment opportunities in the world, the government would encourage the establishment of more SME Banks. So far SME Bank and the Micro Finance Bank of Aga Khan were offering small and medium loans to the SMEs.

“The higher interest rate being charged by the SME banks for offering loans is another issue which is also being looked into by the government,” an official of the ministry of finance said.

When approached he said that budget for 2002-2003 will significantly look after the interests of the small and medium enterprises. He said that business community was demanding that the State Bank of Pakistan should offer loans to SME Bank on lower interest rate so that the Bank could lend money to SMEs on reduced rate. Currently, SME Bank and Micro Finance Bank were charging 15 to 17 per cent mark up, which was considered very high. Both the Banks have reportedly maintained that under these circumstances they could not lower interest rates.