LAHORE: Mian Tariq Misbah President Lahore Chamber of Commerce and Industry, Senior vice president Nasir Hameed Khan and Vice President Tahir Manzoor Ch. have hailed SME Assan Finance Scheme (SAAF) for lending SMEs With Collateral. They said that it was demand of the LCCI to support smes by providing easy access to financing.
The suggestion was presented by the Lcci president in a meeting with Governor SBP. They said that this initiative will improve access to finance for Small and Medium Enterprises (SMEs) in collaboration with the Government of Pakistan to enable businesses who cannot offer security / collateral to access bank finance. This initiative has been named, ‘SME Asaan Finance’ or SAAF to emphasize the SME facilitation feature of this scheme to provide clean lending i.e. lending without collateral to SMEs. SAAF is a refinance and credit guarantee facility which has been developed through a wide-ranging consultative process with the stakeholders including Trade Bodies. The SBP will provide refinance to banks while the Government of Pakistan will support via partial credit guarantees to the participating banks. This support is being provided initially for three years to facilitate investments by banks in technology, infrastructure and team building specialized in SME lending, after which SME financing by banks is expected to be sustainable without SBP or Government support. Speaking about the collateral free lending scheme, Finance Minister, Mr Shaukat Tarin said “the MOF welcomes and supports this innovative initiative of the State Bank, which would enable SMEs without collateral to access bank finance. We look forward to seeing strong participation from commercial banks to take this initiative forward.” The President said that SME sector plays a pivotal role in Pakistan’s economy and is estimated to contribute 40% to GDP and 25% in export earnings. However, despite this SMEs find it difficult to access formal bank finance and only 6.6 % of total private sector credit.
