Federal Government Introduces Credit Risk Sharing Facility For Small Businesses

The federal government has been mulling for long to uplift the entrepreneur sector in Pakistan and empower small businesses. In the wake of empowering small businesses, the government has introduced a credit risk-sharing facility scheme to provide support to small and medium enterprises in Pakistan.

To secure employment under the scheme, SMEs and small businesses will be able to avail concessional loans on easy terms under the SBP refinancing facility. The government has allocated Rs.30 billion for the risk-sharing facility of banks.

The finance ministry says the scheme is for four years. During the risk-sharing arrangements under the scheme, if the banks incur losses in the future in terms of loans, the government will cooperate to reduce the losses and the government will repay 40% of the principal amount of the loan.

Under the Scheme, the banks will issue discounted loans to SMEs and small businesses with a sales turnover of up to Rs.2 billion, and The State Bank of Pakistan will monitor the implementation of this scheme. The government is focused on uplifting the small and medium businesses in Pakistan that could play a vital role in recharging the company’s economy and make the country more productive in the future.

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