KARACHI, Aug 1: Small and medium-size enterprises have expressed disappointment at the increase in discount rate by the State Bank of Pakistan (SBP) in its monetary policy announced on Monday.

President Unisame Zulfikar Thaver said in a statement that the banks were providing financing to the SMEs on 4 per cent spread after adding it to the discount rate of 9.5 per cent but now they will add the spread to 10 per cent, which will make the mark up rate to 14 per cent.

He said that the businesses were expecting that the SBP would lower the rate for SMEs but instead the rate had been increased. For SMEs 13.5 per cent mark up rate was unaffordable and now it had been increased to 14 per cent.

Mr Thaver further said that the cost of production had increased and the SMEs were not generating enough income to meet the growing cost of production. They were seeking relief and demanding a special product for themselves but on the contrary the SBP had burdened them with increased cost of finance.

He lamented that the commercial banks never developed any product for the SMEs and after the announcement of the SME policy it was expected that some special product would be launched for the promotion of SME sector.