KARACHI: Under the recently launched policy for the
promotion of financing for small and medium enterprises (SMEs), Rs6
billion will be available at a subsidised rate of six per cent for
renewable energy projects of up to 50 megawatts in hydro, solar, wind
and biogas categories.
According to the document issued
by the State Bank of Pakistan (SBP) on Friday, the subsidised loan will
be available for up to 12 years. The scheme also incentivises the
establishment of small-scale renewable energy solutions of less than 1MW
to promote solar usage among consumers.
The policy paper
said the financing will be available for the new imported and local
plant and machinery and the purchase of new generators of up to 500 kilo
volt ampere (kVA) with a subsidised rate of 6pc for 10 years.
The
SBP said an innovation challenge fund will also be launched to explore
new solutions to promote SME financing through technology.
The
SBP will also be collaborating with universities and fin-tech companies
to initiate pilot projects for the purpose. The central bank has
recommended that the Ministry of Commerce should encourage SME start-ups
to export their handicrafts and set up a marketplace website for
on-boarding these entrepreneurs on a single platform.
The
policy paper said the credit processing time for small enterprises
loans has been reduced from 30 days to 15 working days and maximum
turnaround time for loan processing of these entities has been fixed at
25 working days.
“The condition of obtaining insurance
for financing up to Rs2 million (previously Rs1m) has been made optional
for small-enterprise and medium-enterprise financing,” said the SBP.
The
central bank has set new targets to achieve the goals for the promotion
of SMEs. The key benchmarks to be achieved till 2020 included an
increase in the SME share from 8pc of private-sector credit to 17pc and a
rise in the number of borrowers from 174,000 to 500,000.
In
an effort to improve access to finance for women entrepreneurs in the
underserved areas, a refinance and credit guarantee scheme has been
offered by the SBP under which financing is available for the setting up
of new businesses or expansion of the existing ones.
The
SBP’s refinance rate is kept at zero per cent while the end-user rate
is up to 5pc. Additionally, 60pc risk coverage is also available against
an outstanding principal of banks. Under this scheme, the financing
limit is up to Rs1.5m for five years. At least 20pc limits have been
allocated for financing in Balochistan, it said.
The SBP,
in collaboration with the Sindh Enterprise Development Fund (SEDF), has
launched a mark-up subsidy and guarantee facility for rice-husking
mills in Sindh. Under this scheme, the SBP provides the refinancing
facility and SEDF provides the mark-up subsidy of 4.75pc plus risk
sharing of 30pc against lending for the purpose of balancing,
modernisation, revamping (BMR) of the rice-husking mills.
The SBP is also supporting the Punjab government in designing a subsidised refinance scheme for the BMR of SMEs in the province.
“The Punjab government is evaluating the possibility of establishing a credit guarantee company,” the SBP said.
