Staff Reporter Karachi
The State Bank of Pakistan will provide financing to banks under SAAF scheme at 1% per annum, which will lend to SMEs at a maximum rate of 9% per annum.
In collaboration with the federal government, the SBP announced an unsecured bank loan scheme for small and medium enterprises in August.
State Bank of Pakistan Governor Reza Baqir said that banks have shown overwhelming response to an innovative financing scheme for collateral free lending to SMEs introduced by the State Bank and supported by the Government of Pakistan.
He said out of 20 banks that competed for participating in this scheme, eight banks under four categories have been selected on the basis of highest amount of finance and highest number of SME clients to be served.
These categories include large banks, mid-sized banks, small banks, and banks in collaboration with fintechs.
The winning banks are Habib Bank Ltd, United Bank Ltd, Allied Bank Ltd, Meezan Bank Ltd, Bank Alfalah Ltd, The Bank of Punjab, JS Bank Ltd and The Bank of Khyber.
“These banks have been selected through a transparent bidding process based on prescribed criteria.” Baqir said.
According to the central bank, the end user rate under SAAF would be attractive for SMEs when compared with usual cost of financing for them from informal sources which can run 25% to 50% per annum.
While appreciating banks’ enthusiastic response, Reza Baqir emphasized early roll out of the scheme by banks.
He also underscored the importance of extensive awareness and marketing of the scheme for the SMEs to fully utilize its benefits.
