MULTAN — Governor of the State Bank of Pakistan (SBP), Dr. Reza Baqir, has stated that the Asaan Credit Scheme (I-SAAF) will be a game changer in improving access to finance for SMEs by addressing the long-standing concern of a shortage of collateral.
Dr. Reza Baqir spoke at length about the importance of SMEs in Pakistan in comparison to what they are getting in terms of access to finance, some of the initiatives SBP took to promote SME finance, and the potential role of SAAF in the near future at the Islamic SME Asaan Financing (I-SAAF) Scheme at Multan Chamber of Commerce & Industry (MCCI) here.
Governor Dr. Baqir emphasised that, with the goal of supporting long-term economic growth in the country, State Bank has undertaken a number of efforts to assist the business community.
Some of the significant initiatives include the launch of a unique collateral-free lending plan for SMEs, Asaan Finance (SAAF), SBP’s concessionary refinancing schemes for various industries, COVID-19 mitigation measures, banking system modernization, and bank persuasion.
He requested assistance from the Chamber of Commerce and Industry in identifying names of employees from its member businesses in order to give loans to them for the construction of homes under the Mera Pakistan, Mera Ghar Housing Scheme.
The governor remarked that the salaried class of the industry earning approximately Rs40,000 per month might take use of the financing opportunity for home construction.
He regretted that only a few Pakistanis could achieve their housing dreams in the past, adding that the government introduced the Mera Pakistan, Mera Ghar plan with a 5-7 percent markup to make it easier for individuals who wish to build homes on 5 to 10 marlas of land.
“This loan was sanctioned by banks for Rs100 billion.” So far, the masses have received Rs30 billion through this plan, although applications for Rs 250 billion are still pending with them.” he stated.
Extolling MCCI’s services for running the SBP scheme for building new hospitals or extending existing ones during COVID-19, Reza stated that it had set an unprecedented example for the rest of the chambers of the country, adding that Rs1 billion was disbursed in Multan for it with only 3% interest and Meezan Bank offered loan at 0% markup under this scheme, for which it deserves praise.
“We selected to make the first distribution of the I-SAAF plan at MCCI because of its previous assistance in this regard,” he explained.
The SBP does not offer loans or engage with clients; rather, it involves banks, according to the governor, who noted that the central bank operates its programmes in partnership with various chambers of business.
“Through the chamber’s participation in these initiatives, we get first-hand information.” The MCCI was quite helpful in ensuring the success of the initiatives.” Reza persisted.
He added that the government provided significant assistance for the loaning programme, adding that the government will safeguard the banks’ risk by 40-60%.
Finally, the governor assured the business community of the central bank’s continuous support and facilitation, and urged them to continue playing an effective role in the country’s overall economic progress.
Earlier, in his welcoming remarks, MCCI president Khawaja Muhammad Hussain commended many government programmes, particularly TERF schemes for financial help to the business community during the coronavirus.
He asked SBP to hold monthly awareness seminars for SME about various programmes for them and women entrepreneurs, adding that a SME mela regarding the Kamyaab Jawan Programme should also be organised at MCCI.
Borrowers should also be granted access to ECIP for the correction of an incorrectly reported report against them, and the paperwork method should be simplified for persons who want to create accounts with banks to start new businesses.
Later, in response to journalists’ questions, the governor stated that the SBP conducts “mysterious shopping” in three areas, including information material, dealing with bankers, and proper information to learn about the problems customers face when borrowing from banks, adding that these are communicated to bank presidents in order to improve services.
He stated that building a house was once a fantasy, but it is now a reality thanks to this strategy designed just for commoners.
Sima Kamil, Deputy Governor of the SBP, Sheikh Fazal Elahi, Khawaja Muhammad Usman, Khawaja Muhammad Yousuf, and progressive farmer Zahid Hussain Gardezi. Cotton Ginner Asim Saeed, senior bank executives, and other key central bank officials were there.
