Govt to provide Rs25.8b loan to SMEs
Aftab Ahmed
Islamabad: The Government will approve Rs 25.8 billion loans under Refinance and Credit Guarantee Scheme for Collateral Free Lending to SMEs in Pakistan.
Sources told Newztodays.com that the government has worked out the financial impact of the Rs 25.8 billion loans to SME banks in Pakistan.
The government will provide Rs 25.8 billion to the State Bank of Pakistan (SBP) that would provide it onwards to banks over a period of four years. The government had not allocated any funds during the current financial year. However, it will allocate Rs 1.19 billion in the next financial year to lend to SMEs in Pakistan.
The Economic Coordination Committee (ECC) has already approved the “Refinance and Credit Guarantee Scheme for Collateral Free Lending to SMEs” in Pakistan.
Federal Minister for Finance and Revenue, Mr. Shaukat Tarin, chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet.
The State Bank of Pakistan presented a summary regarding the “Refinance and Credit Guarantee Scheme for Collateral Free Lending to Small and Medium Enterprises (SMEs)” to facilitate SMEs which do not have collateral to get financing from banks. This scheme will enable banks to lend loans to SMEs in Pakistan.
Furthermore, the proposed scheme will enable the SBP to partner with selected banks through a transparent procedure to lend credit to SMEs in Pakistan. As a result, it will provide collateral-free financing to SMEs to promote sustainable economic growth and development in the country.
The ECC approved the summary and, however, directed the SBP to develop a comprehensive monitoring mechanism with clear-cut benchmarks for effective performance evaluation of the scheme.
SAPM on Poverty Alleviation and Social Protection Dr. Sania Nishtar presented a summary regarding the allocation of funds for launching the 2nd phase of the Ehsaas Emergency Cash (EEC) program. In the meantime, Poverty Alleviation proposed that a number of regular Ehsaas Kafalat beneficiaries would be increased and additional beneficiaries would be added (after identification through ongoing NSER) to mitigate economic hardships amid the COVID-19 pandemic during the second phase of EEC.
After due deliberations, the ECC recommended the Ehsaas program to evaluate whether the new NSER survey targets those sectors which have been adversely affected due to smart and micro lockdowns during COVID-19 and present an updated proposal before the Committee. The underlying rationale is to provide targeted subsidies to support the most vulnerable segments of society during the third wave of the pandemic.
Additionally, secretary Power placed a summary before the Committee for allocation of 3.0 MMCFD gas from well NF Hor-1 (RE) to M/S PPL, for a period of two years, for sale to any third party selected through a competitive bidding process at a mutually agreed and negotiated price under a Gas Sale and Purchase Agreement (GSPA).
The ECC considered and subsequently, approved the summary with a direction that such summaries may be dealt at the level of the concerned Ministry / Division after fulfilling all codal formalities.
The ECC evaluated a summary by the Board of Investment (BOI) regarding exemption from minimum Turnover Tax under Special Economic Zones Act 2012 to facilitate both SEZ developers and its enterprises.
Meanwhile, the Committee directed the Law Division, FBR, and BOI to firm up proposals through mutual consultation regarding the implementation of the exemption from minimum Turnover Tax and present before the next ECC for requisite approval.
The ECC also considered and approved a summary presented by the Ministry of Commerce about condonation of delay of late shipment of vehicles imported by overseas Pakistanis subject to compliance with all other conditions of import.
Technical Supplementary Grants
ECC approved Rs. 100 million for the Ministry of Defence Production for Project Management Cell for Gwadar Shipyard. Secondly, it also okayed Rs. 3 billion in favor of the Government of Gilgit-Baltistan to meet the employee-related expenses. Thirdly, cabinet body approved Rs. 7.2 billion for the Ministry of Housing and Works for the execution of various development schemes.
In addition to these grants, ECC approved some more grants.
- Rs. 85 million for the Ministry of Industries and Production for meeting necessary expenditure.
- Rs. 89.279 million for the Petroleum Division for the supply of gas to Allama Iqbal Industrial City (SEZ).
- Rs. 01 billion for the Ministry of Climate Change for the PSDP Project titled “Ten Billion Tree Tsunami Program Phase-I”.
- Rs. 317 million for the Ministry of Information Technology and Telecommunication for meeting the shortfall of funds for the purchase of IT equipment by NITB.
- Rs. 4.8 million for the Ministry of Housing and Works for the repair and maintenance of Abandoned Property House, Islamabad.
- Rs. 96.418 million for the Ministry of Housing and Works for meeting necessary expenses.
- Rs. 45 million for the Ministry of Housing and Works for National Housing Authority (NEW; Policy and Planning Wing).
- Rs. 7.5 billion for the Ministry of Railways for Payment of Pay and Pensions dues of employees.
