To encourage women’s participation in the economy, State Bank of Pakistan (SBP) has enhanced the financing limit under its Refinance and Credit Guarantee Scheme for Women Entrepreneurs from Rs. 1.5 million to Rs. 5 million.
The decision has been taken in light of feedback received from various stakeholders about current financing limits being insufficient to cover their financing needs.
This decision is in line with the Government of Pakistan’s policy to support and revive economic activities in the country and SBP’s key objective of improving access to finance for priority segments including women entrepreneurs. Initially, in August 2017, State Bank had introduced a refinance and credit guarantee scheme for women entrepreneurs in underserved areas to promote financial inclusion and access to finance for women entrepreneurs in the country.
Subsequently, the scope of the scheme was enhanced to cover all of Pakistan. Under this scheme, SBP provides refinance to participating financial institutions at 0% on their financing to women entrepreneurs at a maximum end-user rate of 5%. Moreover, 60% of risk coverage is also available to the participating institutions.
The enhancement in financing limits under the SBP scheme is expected to increase the financial inclusion of women since more women entrepreneurs are likely to be attracted to setting up new businesses or for expanding the scope of their existing businesses by availing concessional financing under this scheme.