Dr Reza Baqir, Governor of the State Bank of Pakistan (SBP), stated Pakistan’s central bank is preparing to start a scheme to lend up to Rs10 million to cottage industry entrepreneurs without requiring collateral.
The government would protect banks against losses, Baqir informed senior members of the Lahore Chamber of Commerce and Industry (LCCI), and banks will be asked to submit expressions of interest to be involved in the programme.
According to the governor of the central bank, the end-user rate for small businesses and cottage industries will be 9% under the programme, compared to 24% under the current system.
“Foreign exchange laws have been modified and made more business-friendly to promote the growth of the information technology sector, particularly startups,” Baqir said, adding that relaxing the limitations will promote foreign funding in the IT sector.
He claimed that banks have been entrusted with the role of addressing payment concerns for IT firms.
“IT companies can now buy web and digital services from other countries for up to $200,000 without needing State Bank clearance. This limit was previously set at $10,000,” he explained.
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Several programmes, including principal loan modification, the Temporary Economic Refinance Facility (TERF), and a refinance programme for salary payment, were launched by the SBP to support businesses during the Covid-19 outbreak, according to the governor.
He emphasised that small borrowers accounted for more than 90% of those who benefited from the primary debt restructuring scheme. “Over Rs600 billion in loans have been restructured,” he revealed. “Overall, the central bank provided more than Rs2 trillion in relief to the business community through various schemes to assist the economy in regaining its footing,” Baqir said, adding that the government’s prudent policies prevented the debt-to-GDP ratio from rising during the pandemic, whereas it did so in developed economies.
Source: ceotimes.pk
