Staff Reporter
Karachi
SBP introduced a refinance scheme on April 10 to provide concessional credit at 3% interest rate and generous repayment terms to any business that commits to not lay off workers for 3 months. The goal of the scheme was to provide an incentive to businesses to protect jobs. On May 06, 2020 SBP complemented this scheme with a 40% percent risk sharing facility (RSF) on first loss basis from the Government of Pakistan for utilization of this scheme for SMEs and small corporates (defined as business with annual turnover not exceeding Rs. 2 billion). As of June 12, 2020 there has been significant take up in the scheme. Banks have approved loan applications worth Rs. 107.5 billion of which Rs. 23.5 billion is for SMEs and small corporates under the risk sharing facility. Amongst the banks there is considerable difference in the extent to which they have provided credit under the RSF. Some have been more active than others. This note provides to the public bank-level information on two key areas: (a) total amount of loans provided by the bank under the scheme to SMEs and small corporates and (b) the loan amount approved by the bank in percent of the loan amount applied (acceptance ratio).
