SBP further enhances financing limits under Rozgar Scheme to avoid layoffs

SBP announced that it will now finance up to 100 percent of wages and salaries of businesses with an average 3- mon
11 May, 2020
  • SBP announced that it will now finance up to 100 percent of wages and salaries of businesses with an average 3- month wage bill of up to Rs500 million.
  • Banks have received requests of more than 1,440 businesses for the financing of over Rs. 103 billion for providing wages and salaries to around one million employees

The State Bank of Pakistan (SBP) in its bid to further facilitate middle and large businesses, which employ large numbers of people, to ensure payment of wages and salaries under this scheme, has decided to enhance its refinance limits announced earlier.

The central bank on Monday announced that it will now finance up to 100 percent of wages and salaries of businesses with an average 3- month wage bill of up to Rs500 million. This can be used for the onward payment of wages and salaries for the months of April, May, and June 2020, under its Refinance Scheme, to Support Employment and Prevent Layoff of Workers or Rozgar Scheme said SBP in a statement.

Earlier, 100pc financing was available up to a wage bill of Rs200 million only. Furthermore, for businesses with a 3-month wage bill exceeding Rs500 million, State Bank will now finance of up to 75pc with maximum financing of Rs1 billion. Earlier, 75pc financing was available up to a maximum of Rs375 million and 50pc up to a maximum of Rs500 million with immediate effect.

However, businesses that had earlier availed lower financing due to applicable limits can now avail additional financing on the basis of revised criteria.

SBP said that this increase in financing limits along with the government’s risk-sharing facility for collateral deficient SMEs and small corporates will enable the full array of businesses to benefit from SBP’s Rozgar Scheme and hence prevent large scale layoffs.

Further, State Bank has also extended the availability of its refinance scheme to non-deposit taking financial institutions as well. They can now avail of financing under the scheme for payment of wages and salaries of their employees.

The central bank informed that since the launch of the scheme till May 08, 2020, banks have received requests of more than 1,440 businesses for the financing of over Rs. 103 billion for providing wages and salaries to around one million employees whose jobs have been supported because of this scheme.

Of this amount, banks have already approved financing of Rs 47 billion for 500 companies covering over 450,000 employees.

 

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