PM removes 80% export condition for SME long-term financing
Prime Minister Shehbaz Sharif has directed that the requirement of 80 percent exports be abolished for small and medium enterprises seeking long-term financing. He chaired a high-level meeting on facilities for export-oriented SMEs on Thursday.
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- The 80 percent export requirement for SME long-term financing has been abolished.
- No bank will be allowed to deviate from the concessional financing scheme, the PM said.
- Over 10,000 applications were received after the State Bank launched an SME loan portal on 1 November.
Prime Minister Shehbaz Sharif on Thursday directed that the requirement for small and medium enterprises (SMEs) to earn 80 percent of their business from exports be removed. The condition had applied to SMEs seeking access to long-term financing.
He gave the order while chairing a high-level meeting on facilitating export-oriented SMEs. The meeting was attended by Deputy Prime Minister and Foreign Minister Ishaq Dar, several federal ministers, an adviser to the prime minister, a state minister, a parliamentary secretary, the chairman of the standing committee on commerce, the State Bank governor and senior officials.
Participants discussed taxes, refunds, provincial levies, accreditation, logistics, payments and financing problems faced by SMEs. According to the briefing, around 17,000 SMEs in Pakistan are linked to exports.
The briefing also said more than 10,000 applications had been received after the State Bank of Pakistan launched a portal on 1 November to make loans easier to access for the SME sector.
On funding, 300 billion rupees have been allocated under the Export Finance Scheme for SMEs and new exporters. A further 350 billion rupees have been set aside this year for the Long Term Development Finance Facility. The meeting was also told that steps are being taken to raise Pakistani exports to African countries.
The prime minister said no bank would be allowed to deviate from implementing the concessional financing scheme for SMEs and exporters. He directed that government patronage and facilities be ensured for SME growth, and that the government support capacity, skills and business growth.
He also directed that accreditation standards and laboratory expansion be improved for exporters, and that modern laboratories be set up to provide services to exporters at their doorstep.
Why it matters
Small and medium businesses that sell mainly in Pakistan may now be able to apply for long-term financing without meeting the 80 percent export test. Around 17,000 SMEs are linked to exports, according to the briefing, and exporters are directed to get concessional loans from banks without deviation. The State Bank's portal has already drawn more than 10,000 applications. Rs300 billion is allocated for the export finance scheme and Rs350 billion for the long-term facility this year.
