The State Bank of Pakistan is planning to provide (re)financing of Rs. 60 billion to Small and Medium Enterprises in three years, with a credit guarantee scheme for collateral-free lending. This was a major requirement for Pakistan’s 5 million SMEs, which could not get credit due to collateral issues. The SME sector contributes 40% to GDP and 25% to exports.
Pakistan’s Prime Minister had chaired a meeting on SMEs on 18th March 2021, during which he gave directions to submit proposals for credit/financing for SMEs. The SBP drafted this scheme titled “refinance and credit guarantee scheme for collateral free lending to SMEs’’. This scheme involves risk sharing with the Government of Pakistan.
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