Pakistan and Italy on Monday signed a financial agreement under which the later would provide soft loan of Euro 7.75 million for the development of Small and Medium Enterprise (SME) in Pakistan. An agreement was inked between the SME Bank as borrower on behalf of the Government of Pakistan and Artigiancassa Bank as lender on behalf of the Government of Italy.
The Government of Italy through this agreement will provide credit facility of a soft loan of Euro 7.75 million for the provision of small and medium enterprise (SME) development in Pakistan. The loan carries zero percent interest rate payable in 39 years.
The SME Bank would lend this loan to SMEs at a maximum mark up of four percent on loan in Euro and eight percent on loan in Pak Rupee. The credit facility shall be available only to private enterprises or enterprises with a public participation up to 20 percent.
Research centres and Universities may also have access to the soft loan in order to set up pilot projects or demonstration centres in the field of technology innovation and environmental protection. Further, each individual project, even if split into more than one contract, shall not exceed the amount of Euro 550,000 and shall not be less than Euro 30,000.
The credit line will be disbursed through a Small and Medium Enterprise Development Authority and United Nations Industrial Development Organisation (Smeda-UNIDO)''s Investment Promotion Unit (IPU). This IPU would be set up within Smeda premises, through an Italian grant of Euro 1,418,200 (already released in favour of Unido).
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