SBP Asaan Finance Scheme will be a game changer in enhancing access to finance to SMEs: Dr Reza

LAHORE – Governor State Bank of Pakistan Dr Reza Baqir on Friday said that the employers should avail low cost housing scheme loans for the construction of 5 to 10 marla houses for their employees. The risks of these loans would be borne by the government of Pakistan.
He was talking to the LCCI President Mian Nauman Kabir during an exclusive meeting at the SBP office. The meeting was positive and fruitful and a number of issues came under discussion. The governor said that SBP Asaan Finance Scheme (SAAF) would be a game changer in enhancing access to finance to the SMEs as it would address the long outstanding challenge of lack of collateral faced by them. He said that a SME mela would be organized in LCCI in collaboration with SMEDA.
He said that the women entrepreneurs recommended by LCCI would be facilitated for running their businesses. Governor Dr Baqir highlighted that with the objective of stimulating sustainable economic growth of the country, the State Bank of Pakistan had been taking various initiatives to facilitate the business community. Speaking on the occasion, LCCI President Mian Nauman Kabir said that 9.75% policy rate would have dire consequences on economic growth rate. It will surely hinder the process of industrialization and private sector growth. Pakistan should bring its interest rate at par with the regional rates which are much lower (India 4%, Bangladesh 4.75%, China 3.8%, and Sri Lanka 5.5%).
He said that the State Bank deserves appreciation for launching the SMEs Asaan Finance Scheme for collateral free lending to SMEs. In this regard, banks should be given strict timelines in this regard to roll out their products so that the SMEs can benefit from this scheme. Mian Nauman Kabir said that there is a need for urgent measures to bring stability in exchange rate market to stop devaluation as the excessive devaluation has resulted in inflation and increase in cost of doing business of industry. He said that the State Bank should also advocate for urgent tariff measures to restrict luxury and non-essential imports. Furthermore, the option of implementing a currency swap with China from where our imports are more than 13 billion dollars should also be analyzed.
The LCCI president said that there is a need of a coherent National Economic Policy in which the State Bank, private sector and relevant government departments are all on board. State Bank should share its micro and macroeconomic vision with the business community. He said that in order to enhance our exports to the untapped potential markets like Russia and Central Asia, formal banking channels should be established on priority basis. We would also request the State Bank to devise a special mechanism for enhancing for barter trade with Iran.
Mian Nauman Kabir said that the State Bank initiated the Temporary Economic Refinance Facility (TEFR) for provision of long term finance facility at concessionary rates for purchase of new imported/locally manufactured plant & machinery for setting up new projects. This scheme expired on 31st March 2021. We would request the State Bank to commence this scheme again for targeted sectors and SMEs. He added that there are a large number of businesses who are not able to clear their bank liabilities in time due to the current liquidity crisis and hence their names are included in Electronic Credit Information Bureau. This makes it hard for them to secure credit from any financial institution. We would request the State Bank to provide some relaxation to business community in this connection.

SBP governor meets LCCI president


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