SBP To Provide Rs. 400 Billion in Loans to SMEs by 2020

The State Bank of Pakistan (SBP) through National Finance Inclusion Strategy (NFIS) will provide financial access to 50% of small and medium enterprises (SMEs) in the country.

SBP is going to extend Rs 400 billion loans to SMEs by the year 2020, said Assistant Director of SBP, Imran Ahmed while addressing the 10th Pakistan SME Conference 2016 on Tuesday.

The experts and regulators deliberated upon broad-based solutions for accelerating growth in SME sector.

They urged the creation of a supportive regulatory environment to optimize productivity through technological and financial access, as SMEs have the potential to bring a powerful economic revolution in a developing country like Pakistan.

The theme of the moot was ‘Facilitating SMEs Makes Economic Sense’. The key development topics like infrastructure, regulatory realignments, financing, reforms, sustainability, facilitation and empowerment’ along with good governance and human resources development came under discussion.

The stakeholders urged tangible measures to modernize infrastructure, banking, leasing, insurance and logistics to build capacity. The need to reduce taxes and duties on alternate energy solutions for SMEs, to over-come the hazards of energy-crisis was also highlighted.

Board Member of Small and Medium Enterprises Development Authority, M A Jabbar said:

Advocacy for SME development needs to be strengthened and preferential treatment should be given to the SMEs, which is the deprived segment.

Chairperson of Sindh Board of Investments, Ms Naheed Memon said:

China is looking at Pakistan as a partner. Our institutions should perform well to take full advantage of China Pakistan Economic Corridor as countless ancillary businesses will emerge from this endeavour.

Group Head of Micro and SME at Bank Al Falah, Khurram Hussain on ‘Re-Thinking SMEs-To do Things Differently’ emphasised digital technologies and global best-practices to ease SME lending, which was showing better performance, and a great success for SME and banking sectors.

The SBP made a special mention of the initiatives taken by the Bank, he added.

Zulfikar Thaver, President Union of Small and Medium Enterprises and Chairman on Technical Committee of NFIS said that setting up of new well equipped and specialised industrial estates for SMEs was a part of the strategic way-forward.

Research and Development activities should be nurtured for creating collective advantages. The government should promote the housing industry, which boosts the demand for more than 36 sectors and a vast range of products, he added.

Special incentives and tax-relief programmes should be offered to promote transfer of new technologies among SMEs. The conflict-resolution mechanism (Ombudsman) must be speeded up to facilitate smoother operations and faster growth, while closer coordination between SME promotion institutions is also a need of the day, he said.

Board member of Zarai Taraqiati Bank, Majyd Aziz on ‘New Financial Paradigm for Agriculture’, said:

Technology should be adopted to improve agriculture whereas, food security should be improved through best-practices and establishing farmers entrepreneurial associations to safeguard their interests.

Group head of SME at Pak-Brunei Investment Company, Ms Arjumand Qazi on ‘Making SMEs Bankable’ said:

SMEs in Pakistan are not bankable due to many reasons like, misleading documentation of these small businesses. Lenders should work beyond the balance sheet and evaluate their qualitative potential, business model and products.

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