The state bank of Pakistan (SBP) and Islamabad Chamber of Commerce and Industry (ICCI) arranged a joint awareness session on promotion of providing financial services to SMEs. In this regard, the representative of State Bank gave a very detailed presentation to the participants, about the different financing schemes for these small and medium businesses.
At present although 40% of the SMEs have banking relationships, only 6% are availing loan facilities from banks. State Bank of Pakistan is highly interested in the development of these industries. It has set its target to increase the financial inclusion of SMEs from current 6-8% to 17% by 2020. State Bank has launched around nine financing schemes at 6% mark-up, in order to facilitate them in their growth and expansion. Regulatory framework and other formalities would be simplified for them. SBP expects that SMEs will benefit largely from these schemes and these measures would prove as ‘catalyst’ in faster development and growth.
In his welcome speech, ICCI Senior Official Muhammad Naveed Malik said that SMEs constitute over 90% of total business enterprises in Pakistan. 30% of GDP, 25% of exports and 78% of industrial employment is contributed by SME sector. The major hindrance in availing the financing facilities from the banking institutions is requirement of tough collateral. ICCI representative asked SBP to instruct banks to offer loans to these small and medium entrepreneurs on soft terms. This would not only build a good relationship with banks but also help in faster growth.
Strong Small and medium enterprises (SMEs) would yield multiples benefits like enhanced trade and industrial activities, more investment and good job market. He also emphasized on government to play and effective role in promoting SMEs.