Covid-19 crisis: SBP urged to evolve separate relief policy for SMEs

State Bank of Pakistan (SBP) has been requested to evolve a separate relief policy for the Small and Medium Enterprises (SMEs) in order enable them to maintain their workforce and survive during ongoing Covid-19 crisis.

Talking to Business Recorder, Mashood Ali Khan, auto-parts manufacturer and former chairman Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) said that almost every international research report anticipated a sharp fall in regional growth between 1.8 and 2.8 percent in 2020 due to covid-19 crisis.

Therefore, every country, which is affected by the virus, focuses its resources on policies for creating financial relief packages for its industries.

He said that SMEs account for roughly 70 percent of the Pakistan economy and generated over 10 million jobs and was considered as backbone of the country's economy.

However, majority of SMEs feared that economic impact would lead them towards closure due to uncertain prospect of its business during and after Covid-19 crisis, Mashood said and added that although SBP in collaboration with Pakistan Banks Association (PBA) announced relief package for businesses, small businesses could not afford to pay reduced rate of 4% against the payment of staff salary & wages.

He urged the central bank to evolve a separate policy for SMSs to enable them to maintain their workforce and survive in this critical condition and get long term sustainability.

He said that majority of SMEs would only survive and continue contributing towards economic activities in the post Covid-19 crisis if they were financially supported hence SBP was requested to review its relief policy and provide them loans to pay off salaries for its employees at lower interest rate of ZERO per cent.