KARACHI, Jan 14: State Bank of Pakistan (SBP) has signed an agreement with five leading banks and Small and Medium Enterprise Development Authority (Smeda) for catering to the financial needs of SMEs.

This was stated by Smeda Chief Executive Shahab Khawaja while addressing a press conference here on Friday. Provincial Smeda chief Ejaz Majeed was also present on the occasion.

Mr Khawaja said that under this arrangement these banks would set up 50 branches for providing financing to SME sector. The bank officers at these branches would be trained in SME lending, with a changed mind-set towards this sector.

"These branches will design new procedures for lending to facilitate SMEs," he added. He said that Asian Development Bank would provide a credit line of $170 million for this purpose including $152 million for project loan.

He said a part of this credit line would be spent on SME policy framework. For this reason Smeda would hold a series of workshops for small and medium enterprises in major cities and first workshop would be held here on Saturday.

The Smeda chief said the purpose of holding these consultative workshops was to create awareness among SMEs about the policy and management issues. The second workshop will be held at Lahore on January 19, third at Quetta on January 29, fourth at Peshawar on February 9 and the last one at Islamabad in March.

The recommendations gathered at these workshops would be presented at the national workshop in Islamabad for preparation of national SME policy draft for onward submission to the federal cabinet through Minister for Production and Industries Jahangir Tareen. He was of the view that the absence of national policy was the major reason for the problems being faced by SME sector in the country. -APP