Lahore: State Bank of Pakistan (SBP) Chief Manager Ansar Iftikhar Butt said on Monday that a new strategy is being developed to increase financing for Small and Medium Enterprises (SMEs). under which value chain financing for SMEs will be promoted and special focus will be given to financing and handholding of SMEs.
He expressed these views during his visit to Lahore Chamber of Commerce and Industry (LCCI) where LCCI Acting President Tanveer Ahmed Sheikh welcomed the SBP delegation. while SBP Deputy Chief Manager Bilal Shafqat. Deputy Director Umar Makhdoom and other officials were part of the delegation. LCCI Executive Committee members Sheikh Fayyaz and Nadeem Ansari were also present.
Acting President LCCI Tanveer Ahmed Sheikh said that instead of relying solely on collateral-based financing. alternative financing models should be introduced for SMEs. He said that SMEs could also be facilitated through local LC models and insurance-based financing mechanisms.
He said that the textile sector was facing serious difficulties in obtaining financing and opening Letters of Credit (LCs). ‘Banks are not ready to provide even a single rupee of financing to the textile sector. ‘ he said. adding that this situation was affecting industrial production and export activities. He urged the State Bank to take practical measures for the immediate resolution of financing issues faced by textile sector and other key industrial sectors.
Tanveer Ahmed Sheikh proposed establishing a permanent State Bank desk at the Lahore Chamber so that financing-related cases and issues of the business community could be resolved directly. He said that the initiative would facilitate businesses and help eliminate unnecessary delays in resolving banking-related matters.
He also stressed the need to simplify the procedure of the Asaan Karobar Scheme further so that more small and medium-sized businesses could benefit from the facility.
Anser Iftikhar Butt said that Lahore Chamber should identify sectors and companies where SME financing was most needed so that effective financing mechanisms could be developed for these sectors. He said that guarantees provided by large companies for SMEs could help resolve documentation and other financing-related issues to a significant extent.
He said that the Lahore Chamber should nominate a focal person to address issues faced by SMEs. while the State Bank would work jointly with the Lahore Chamber for the promotion and financing of SMEs. He emphasized that making SME financing more effective was essential for sustainable economic growth and employment generation.
They also discussed in detail SME financing. value chain financing. issues faced by the textile sector. opening of LCs. alternative financing models and the provision of banking facilities to the business community.
