KARACHI: The State Bank of Pakistan (SBP) on Thursday advised banks to extend loans to the small and medium enterprises (SMEs) under the Prime Minister’s Youth Business Loans scheme.

In this regard, the SBP held an Orientation Workshop on Prime Minister’s Youth Business Loans (PMYBL) scheme, a press release said.

Abid Qamar, SBP Director Infrastructure Housing and SME Finance Department led the workshop which was attended by representatives from SBP, Smeda, business and product development heads of commercial banks. On the occasion, Qamar highlighted the importance of the SME sector for spurring economic growth, employment generation and export earnings.

Also read: SME development

He lamented that despite significant contribution of SME sector in the country’s GDP, the sector is not getting its due share of financing from the banking system.

During the last five years, SMEs share in the banks total financing dropped to 6 per cent from 17pc.

He said the SBP is aware of the situation and has undertaken various initiatives for increasing the size of credit by the banks to the SME sector.

“Considering the youth loan programme can play a very effective role in promotion of small enterprises and thus job creation, SBP is providing full support to the government and banks working as ‘executing agencies’ for successful implementation of the scheme,” he said.

During the workshop, Irtiza Kazmi, EVP, and Zubair Mirza, SVP National Bank of Pakistan (NBP) briefed the participants about NBP’s PMYBL product and explained in detail various operational aspects of their financing under the said scheme. NBP is the main bank providing loans under the PMYBL.

Kazmi said that NBP is determined to support the government initiative of providing youth with opportunities of financial independence through self-employment under the PMYBL programme.

Published in Dawn, September 12th, 2014