Collateral free loans to businesses soon

Staff Reporter

Governor State Bank of Pakistan Dr. Reza Baqir has said that the SBP is going to initiate a scheme for Financing to Cottage Industry up to Rs 10 million without the collateral.

He said that the government will give guarantee to the banks against losses and will invite Expression of Interest from banks for inclusion in this scheme.

The Governor SBP said that the end user rate for the small businesses and cottage industry in this scheme would be 9 percent which otherwise get loans at 24 percent.

According to LCCI spokesman here Monday, Baqir Reza was talking to LCCI President Mian Tariq Misbah and Vice President Tahir Manzoor Chaudhry at State Bank of Pakistan.

The meeting was also attended by Deputy Governor State Bank Sima Kamil, Director Policy Exchange Department Arshad Bhatti and other senior officials of State Bank.

Baqir Reza said that to facilitate the growth of IT sector, particularly the startups, foreign exchange laws have been relaxed and made more business friendly.

The foreign funding in IT sector will be greatly facilitated by relaxation in laws. Banks have been fully delegated to handle the payment issues of IT companies.

He said that the IT companies can now get web and digital services from abroad for up to US$ 200,000 without the approval of State Bank. Previously this limit was US$ 10,000.

The Governor State Bank of Pakistan said that SBP has initiated various schemes like Principal Restructuring, TERF and Refinance scheme for payment of salaries to support the businesses during adverse Covid times.

He said that more than 90 percent beneficiaries of the scheme for restructuring of principal amount were the small borrowers. More than Rs 600 billion loans were restructured.