Punjab Minister for Industries and Commerce Chaudhry Shafay Hussain has announced a Rs300 billion financing programme this year, under which interest-free loans of up to Rs100 million will be provided to businesses in the province. He made the announcement while chairing a meeting of the Board of Directors of the Punjab Small Industries Corporation (PSIC) at PSIC House on Davis Road in Lahore. The board reviewed a one-point agenda and took several decisions aimed at accelerating industrial and commercial activity. The programme had been previewed earlier, when the minister said at a previous board meeting that the Bank of Punjab would provide the Rs300 billion in business financing and that the launch was scheduled for October, according to Business Recorder.
The financing structure has three tiers based on loan size. Loans of up to Rs100 million will carry no interest, loans between Rs100 million and Rs1 billion will carry a 3 percent mark-up, and loans between Rs1 billion and Rs5 billion will carry a 5 percent mark-up. The minister said interest-free loans are already being provided under the Chief Minister’s Asaan Karobar Finance Scheme, which has been the province’s main interest-free lending vehicle for small businesses. Its second phase was announced with Rs90 billion in interest-free loans, and in January the minister said that the Asaan Karobar Finance and Asaan Karobar Card schemes had together provided Rs70 billion within six months, reaching 108,371 businesses across Punjab, according to APP.
Alongside the financing announcement, the board approved filing an appeal in the Federal Constitutional Court against a decision on employee pensions. Hussain said the ruling of the Lahore High Court division bench would be challenged in the federal court, although the details of the dispute were not outlined in the report. The minister also directed that work on improving infrastructure in the province’s small industrial estates be expedited, in line with his earlier statements that road infrastructure, sewerage, and drainage systems in the estates would be upgraded. The directive suggests the government wants the financing push and the physical infrastructure for industry to move forward together, since access to capital matters less to a small manufacturer if the estate where the unit is set up lacks basic facilities.
The meeting was also informed that the first small industrial estate has been established in Mandi Bahauddin, where plots will be allotted through a fully online process, and 20 percent of the plots have been reserved for overseas Pakistanis. The online allotment is the most digital part of the announcement, as it removes the need for applicants to deal with paper-based procedures and allows people abroad to take part directly. The reports on the board meeting do not say exactly when the Rs300 billion programme will open for applications, how borrowers will apply, or what eligibility conditions will apply to the larger loans, so businesses interested in the scheme will need to wait for further details from PSIC and the Bank of Punjab before planning their financing around it.
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