KARACHI, Mar 12: The Sindh government, in collaboration with the State Bank of Pakistan, has offered interest subsidy of 6.25 per cent and credit risk sharing facility of up-to 30 per cent against the long term loans to be extended to rice husking mills in Sindh.

The State Bank said on Tuesday that these additional incentives are being offered by Sindh Enterprise Development Fund (SEDF) will encourage Rice Mills of Sindh to carry out BMR of their units so as to reduce their losses and improve the quality of their products.

The improved profitability projections with the availability of additional incentives under the scheme will also encourage potential Small and Medium Enterprises (SMEs) to establish new rice husking units in Sindh.

According to the State Bank, mark up rate for the facility will remain the same viz.9 per cent for financing up-to 5 years as applicable under SBP’s Refinance Facility; however, the end-user rate will be 2.75 per cent per annum only, i.e. the difference of 6.25 per cent (SBP share) will be borne by SEDF.

Banks will be offered credit guarantee cover of 30 per cent against their outstanding loans under the Facility. As mentioned, the cover will be provided on the strength of financial support extended by SEDF.

The State Bank said the facility will be available against loans granted up-to the period of five years.

Maximum loan size for a single borrower will be Rs10 million.

The banks which have already obtained refinance limits under SBP’s Refinance Facility for Modernisation of SMEs may now apply for the guarantee and subsidy limits under this Scheme, said a circular issued by SBP.