The federal government is set to finalize cash flow support plan for micro, small & medium enterprises (MSMEs) to disburse Rs 300 billion including Rs 12000 per head cash transfer to six million daily wagers, payment of six months electricity bills, and release of soft loans and grants, said sources.
The plan would be finalized by the end of the current month, they added. At present, the ministry of industries is in consultation with the power division; distribution companies (DISCOs), AJK government, GB government and K-Electric.
The government is also in touch with the international donors like World Bank, Asia Infrastructure Development Bank and Islamic Development Bank besides the State Bank of Pakistan (SBP), local banks and web designers to create a portal in line with the Ehsaas programme to devise a mechanism of cash transfer to the daily wagers.
Under the plan, the federal government has allocated Rs 200 billion and the State Bank of Pakistan has announced Rs100 billion loans both for SMEs and the agriculture sector. Out of Rs 200, Rs75 billion have already been disbursed among six million labourers in the form of cash transfer of Rs 12000 per head under the Ehsaas programme. While another Rs 51 billion would be offered to SMEs as a grant for the payment of electricity bills and the action plan is being finalized by the ministry.
Talking to Business Recorder, Chief Executive Officer of Small & Medium Enterprises Hashim Raza confirmed the working of the ministry on cash flow support plan, saying that Rs 51 billion would be disbursed to the MSMEs in the form of credit equivalent to the consumption of May-June 2019. The total bill of these months would be disbursed in one go in the form of cash amount. They would be supposed to utilize this credit for the next six months, starting from the month of May up to October 2020 to pay their utility bills. The objective is to cater to their needs for this period in case the impact of Coronavirus continues for the next six months, he added.
According to him, the data of DISCOs has been utilized to assess the needs of SMEs. Out of the remaining Rs 75 billion, about another Rs 50 billion would be disbursed by the ministry directly to the employees of SMEs through a demand generated on the pattern of Ehsaas programme. He said the ministry would provide cash relief to the remaining number of employees attached with SMEs, which would be required to register with the ministry's portal and provide details about their annual turnover and the number of employees. Cash transfers to these employees would be made after due confirmations, he added.
Meanwhile, he said, after deduction of Rs 25 billion for the agriculture sector from the SBP's allocated Rs 100 billion, the remaining Rs 75 billion would be coupled with remaining Rs 25 billion out of the Rs 200 Prime Minister Relief Fund, approximately Rs100 billion would be allocated for soft loans and grants for SMEs.
He said this amount would be used to provide subsidy on the markup being charged by the banks from SMEs. The government would ensure a grace period of six to twelve months against these loans while the total duration for repayment would be in between 24 to 36 months.
According to him, no decision has been taken regarding the component of the grant so far and it is under consideration of the ministry. He said both the donor agencies and SBP is being consulted to finalize the plan.