ISLAMABAD  -  The Pakistan Hosiery Manufac­turers and Exporters Associa­tion (PHMA) has proposed the State Bank of Pakistan (SBP) to allocate more funds for renew­able energy schemes, including solar energy financing exclu­sively to the export-oriented value-added textile sector. This strategic allocation will not only boost apparel sector’s growth but also promote a more inclu­sive and resilient economy.

These views were expressed in an interactive session held here at PHMA regional office to review the private sector credit off-take, especially to the Appar­el sector’s SMEs, with the PHMA north zone senior vice chair­man Amanullah Khan in the chair. Participants of the meet­ing urged the Federal Board of Revenue (FBR) to strengthen the industry and export sector by releasing their payment, as a huge amount of refund claims under DLTL 2021 is pending, beside speedy payment of sales tax refunds, because the com­mitment of the FBR to instantly release exporters’ tax refund claims through FASTER System seems to be just an eyewash.

Amanullah Khan, in his key note address, proposed the central bank to review its credit policies by fixing a special quota to finance the hosiery sector’s small and medium enterprises, as only the large industries have been availing government’s all major concessional export loan­ing facilities, with very limited financing is left for the PHMA members which are the back­bone of the economy. PHMA north zone senior vice chair­man observed that despite sig­nificance of SMEs, more than 5 million SMEs face a significant credit gap, receiving just 7 per­cent of private sector credit. To achieve this, we must advocate for targeted and fixed alloca­tions for apparel sector SMEs in renewable and solar energy financing, particularly those aimed at the export-oriented sector. He said that the State Bank of Pakistan has launched various policies for the pro­motion of SME finance, but the required results were still awaited. It was unfortunate that banks were always reluctant to provide financing to SMEs as their financing continued to show negative growth.

PHMA members, on this oc­casion, said that the govern­ment with a view to help grow the apparel exports will have to take solid measures to strength­en the industry, especially the SMEs, saving the livelihood of millions of workers associated with the small industries. The government will have to make a visible reduction in markup rate to help grow the busi­nesses, particularly the SME sector, as Pakistan needs mil­lions of jobs annually. We need to highlight the critical role of Small and Medium Enterprises in driving sustainable economic development in Pakistan. With an estimated 5.2 million busi­nesses, the SME sector is a cornerstone of our economy, fostering employment, growth, and export diversification. He said that in its endeavour to provide concessional financing to the export-oriented sector, the State Bank Pakistan had an­nounced to extend the financing scheme for renewable energy for next two years till 2024. The objective of the scheme was to lend support in addressing the dual challenge of energy short­age and climate change through the promotion of renewable en­ergy. It may be mentioned here that Pakistan’s economy is fac­ing the dual challenge of energy shortage and climate change. The inadequate supply of en­ergy has severely impacted the growth of industries. Similarly, the effects of climate change have been observed in the form of devastating floods, droughts, heat waves and changing weather patterns. These chang­es essentially inhibit our ability to develop sustainably.