SBP, Banks, SCI-Pak to develop network to address financial needs of SMEs

KARACHI: The State Bank of Pakistan, commercial banks and SCI-Pak may jointly develop an Energy and Resource Efficient (E&RE) network to address the financial needs of Small and Medium Enterprises (SMEs).

This consensus was arrived at a roundtable meeting which was jointly organised by SBP and the European Commission- Funded SCI-Pak Project in Karachi on Tuesday evening.

According to an SBP announcement made here on Wednesday, the roundtable also decided that awareness campaigns for SMEs should be launched at the grass root level to educate the masses regarding different financial instruments developed by SBP for the modernisation of SMEs.

The purpose of this roundtable was to identify strategies to foster the communication and interaction between SBP, financial institutions and Small and Medium Enterprises (SMEs) in facilitating SMEs access to finance (A2F) to undertake energy and resource efficient (E&RE) production.

The roundtable, chaired by Director Infrastructure Housing and SME Finance Department of SBP, Mohammad Mansoor Ali, was attended by representatives of commercial banks, International Finance Corporation (IFC), SCI-Pak Project Consultants and business associations of textile processing and leather sector.

Mansoor Ali observed that although SMEs are typically vulnerable to economic downturns, yet given the importance of SMEs to the country's growth and employment prospects, there was need to ensure and encourage continued access to finance for SMEs.

He said SBP on its part has unveiled a number of initiatives to encourage lending to the sector. These include establishment of Credit Guarantee Scheme for SMEs and concessionary refinance scheme for modernisation of SMEs, revision of regulatory framework for SME financing, conducting SME cluster surveys and financial awareness programmes for SMEs.

He emphasised that for sustainability of any initiative focused toward fulfilling financing needs of SMEs there should be a strong commitment on part of both the financial institutions and business associations.

Representative of SCI-Pak Project Omar Malik, informed the participants that E&RE is a measure to reduce the consumption of energy and resources and to minimise the creation of waste and Greenhouse Gas emissions while at the same time strengthening the SMEs economic performance and competitiveness through cost reductions.

Copyright APP (Associated Press of Pakistan), 2011