KARACHI-The State Bank of Pakistan on Monday enhanced the scope and financing limits under its Rozgar Scheme. According to an SBP press release, since its launch of Refinance Scheme to support employment and prevent layoff of workers, called as Rozgar Scheme, the SBP had been constantly receiving feedback from various stakeholders, making the scheme more facilitative for businesses and creating incentives to prevent layoff of employees under the current COVID-19 pandemic scenario.

Many of the changes in the scheme were carried out to ensure that the benefits of the scheme particularly reach to the SMEs that offer employment to a large number of people. In this regard, the recently announced government’s risk sharing facility and allowing corporate guarantees as collateral were expected to incentivize banks in extending loans to collateral deficient SMEs.

Now taking another step further to facilitate middle and large businesses, which employ large numbers of people, to ensure payment of wages and salaries under the scheme, the SBP decided to enhance its refinance limits announced earlier.

“Hence, State Bank will now finance up to 100 per cent of wages and salaries of businesses with average three-month wage bill of up to Rs 500 million. This can be used for the onward payment of wages and salaries for the months of April, May and June, 2020,” the press release said.

Earlier, 100 per cent financing was available up to a wage bill of Rs200 million only. Similarly, for businesses with 3-month wage bill exceeding Rs500 million, the State Bank would now finance up to 75 per cent with maximum financing of Rs1 billion. Earlier, 75 per cent financing was available up to a maximum of Rs375 million and 50 per cent up to a maximum of Rs500 million. However, the businesses that had earlier availed lower financing due to applicable limits could now avail additional financing on the basis of revised criteria.

The SBP circular in that regard was available at http://www.sbp.org.pk/smefd/circulars/2020/CL10.htm, the press release said. This increase in financing limits along with Government’s risk sharing facility for collateral deficient SMEs and small corporates will enable the full array of businesses to benefit from SBP’s Rozgar Scheme and hence prevent large scale lay-offs. Further, State Bank has also extended the availability of its refinance scheme to non-deposit taking financial institutions as well. They can now avail financing under the scheme for payment of wages and salaries of their employees.

Since the launch of the scheme till May 8, banks have received requests of more than 1,440 businesses for the financing of over Rs103 billion for providing wages and salaries to around one million employees whose jobs have been supported because of this scheme. Of this amount, banks have already approved financing of Rs47 billion for 500 companies covering over 450,000 employees.

A complete list of the measures taken by the SBP to support the economy and public health since the outbreak of COVID-19 is available at: http://www.sbp.org.pk/corona.asp. If end-users would like further information on these SBP measures in the context of COVID-19 or if they are experiencing issues with commercial banks in benefiting from these measures, they can contact a dedicated COVID-19 SBP team by email at covid19.stimulus@sbp.org.pk or by phone at 111-727-273.