ISLAMABAD, Feb 19: The government has decided to restructure the Small and Medium Enterprise (SME) Bank to make it a commercial bank to realize the full potential of the SME market.

Official sources told Dawn on Wednesday that for the ultimate privatization and capacity building of the SME Bank, it was not only necessary to convert it fully into a commercial bank but also to cater to the needs of the SMEs.

The Small and Medium Enterprises (SMEs) lack of access to finance is a major impediment to investment and business growth, and the bank has yet to meet the demands.

The proposed restructuring of the SME Bank balance sheet would include the spin off of the recovery operation from normal banking through creation of a company with a maximum life of five years and transfer of the loan and investment portfolio issued prior to February 2000 to this recovery company.

Moreover, netting of SME Bank assets and liabilities with State Bank of Pakistan (SBP) and recapitalization.