ANL 31.50 Decreased By ▼ -0.29 (-0.91%)
ASC 18.90 Decreased By ▼ -0.83 (-4.21%)
ASL 26.27 Decreased By ▼ -0.13 (-0.49%)
AVN 91.95 Decreased By ▼ -0.05 (-0.05%)
BOP 8.30 Decreased By ▼ -0.06 (-0.72%)
BYCO 12.85 Increased By ▲ 0.06 (0.47%)
DGKC 127.20 Increased By ▲ 0.10 (0.08%)
EPCL 47.90 Decreased By ▼ -0.86 (-1.76%)
FCCL 24.18 Increased By ▲ 0.12 (0.5%)
FFBL 26.55 Increased By ▲ 0.25 (0.95%)
FFL 17.80 No Change ▼ 0.00 (0%)
HASCOL 11.32 Decreased By ▼ -1.01 (-8.19%)
HUBC 80.25 Decreased By ▼ -0.75 (-0.93%)
HUMNL 9.12 Increased By ▲ 0.36 (4.11%)
JSCL 23.40 Decreased By ▼ -0.93 (-3.82%)
KAPCO 43.07 Decreased By ▼ -0.18 (-0.42%)
KEL 4.30 Decreased By ▼ -0.21 (-4.66%)
LOTCHEM 15.99 Increased By ▲ 0.19 (1.2%)
MLCF 48.75 Increased By ▲ 0.10 (0.21%)
PAEL 35.40 Decreased By ▼ -0.40 (-1.12%)
PIBTL 11.96 Increased By ▲ 0.75 (6.69%)
POWER 10.20 Decreased By ▼ -0.16 (-1.54%)
PPL 90.49 Decreased By ▼ -0.66 (-0.72%)
PRL 26.15 Increased By ▲ 0.50 (1.95%)
PTC 13.00 Decreased By ▼ -0.01 (-0.08%)
SILK 1.84 Increased By ▲ 0.18 (10.84%)
SNGP 47.58 Decreased By ▼ -0.77 (-1.59%)
TRG 164.60 Decreased By ▼ -0.90 (-0.54%)
UNITY 44.75 Decreased By ▼ -2.35 (-4.99%)
WTL 4.14 Increased By ▲ 0.22 (5.61%)
BR100 5,278 Decreased By ▼ -22.7 (-0.43%)
BR30 27,522 Decreased By ▼ -167.85 (-0.61%)
KSE100 48,239 Decreased By ▼ -195.99 (-0.4%)
KSE30 19,426 Decreased By ▼ -94.82 (-0.49%)

ISLAMABAD: The State Bank of Pakistan (SBP) has disbursed Rs 238 billion among 2,958 small and medium enterprises (SMEs) so far to incentivise businesses and avoid laying off their workers during the coronavirus pandemic, says the International Monetary Fund (IMF).

The IMF in its updated report on "Policy Actions Taken by Countries" reviewed various steps taken by Pakistan since March to deal with the Covid-19 crisis.

It further stated that the daily new coronavirus cases have exceeded the 2,000-mark, and the positivity rate has been on an upward trend pointing to a second wave of virus.

As a result of the Covid-19 shock, the economic activity worsened notably, with growth preliminarily estimated at -0.4 percent in fiscal year 2020.

A gradual recovery is expected in FY 2020.

To mitigate a second wave, the authorities made it compulsory for all citizens to wear a face mask outside of their homes and have strengthened the enforcement of Standard Operating Procedures (SOPs). Smart lockdown measures have been also reintroduced.

These included lockdowns of selected hotspots in major cities, the closure of restaurants and shops by 10pm, and limits to the attendance in public and private gatherings.

The SBP has expanded the scope of existing refinancing facilities and introduced three new ones to: (i) support hospitals and medical centers to purchase Covid-19-related equipment (41 hospitals, Rs 7.99 billion, to date), (ii) stimulate investment in new manufacturing plants and machinery, as well as modernization and expansion of existing projects (240 new projects, Rs 186 billion, to date), (iii) incentivize businesses to avoid laying off their workers during the pandemic (2,958 firms, Rs 238 billion, to date).

Given their success, these facilities have been extended beyond their original deadline of June 2020 to September or December 2020.

Moreover, the SBP introduced temporary regulatory measures to maintain banking system soundness and sustain economic activity.

These included: (i) reducing the capital conservation buffer by 100 basis points to 1.5 percent, (ii) increasing the regulatory limit on extension of credit to SMEs by 44 percent to Rs 180 million, (iii) relaxing the debt burden ratio for consumer loans from 50 percent to 60 percent, (iv) allowing banks to defer clients' payment of principal on loan obligations by one year (with a total of Rs 654 billion being deferred to date), (v) relaxing regulatory criteria for restructured loans for borrowers who require relief beyond the extension of principal repayment for one year, and (vi) suspending bank dividends for the first two quarters of 2020 to shore up capital.

The SBP has also introduced mandatory targets for banks to ensure loans to construction activities account for at least five percent of the private sector portfolios by December 2021.

Copyright Business Recorder, 2020