LAHORE: Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has proposed the State Bank of Pakistan to allocate more funds for renewable energy schemes, including solar energy financing exclusively to the export-oriented value-added textile sector. This strategic allocation will not only boost apparel sector’s growth but also promote a more inclusive and resilient economy.
These views were expressed in an interactive session held here at PHMA regional office on Sunday to review the private sector credit offtake, especially to the Apparel sector’s
SMEs, with the PHMA north zone senior vice chairman Amanullah Khan in the chair.
Participants of the meeting urged the Federal Board of Revenue (FBR) to strengthen the industry and export sector by releasing their payment, as a huge amount of refund claims under DLTL 2021 is pending, beside speedy payment of sales tax refunds, because the commitment of the FBR to instantly release exporters’ tax refund claims through FASTER System seems to be just an eyewash.
In his keynote, Amanullah Khan proposed the central bank to review its credit policies by fixing a special quota to finance the hosiery sector’s small and medium enterprises, as only the large industries have been availing government’s all major concessional export loaning facilities, with very limited financing is left for the PHMA members which are the backbone of the economy.
PHMA north zone senior vice chairman observed that despite significance of SMEs, more than 5 million SMEs face a significant credit gap, receiving just 7 percent of private sector credit. To achieve this, we must advocate for targeted and fixed allocations for apparel sector SMEs in renewable and solar energy financing, particularly those aimed at the export-oriented sector.
He said that the State Bank of Pakistan has launched various policies for the promotion of SME finance, but the required results were still awaited. It was unfortunate that banks were always reluctant to provide financing to SMEs as their financing continued to show negative growth.
PHMA members, on this occasion, said that the government with a view to help grow the apparel exports will have to take solid measures to strengthen the industry, especially the SMEs, saving the livelihood of millions of workers associated with the small industries. The government will have to make a visible reduction in markup rate to help grow the businesses, particularly the SME sector, as Pakistan needs millions of jobs annually.
We need to highlight the critical role of Small & Medium Enterprises in driving sustainable economic development in Pakistan. With an estimated 5.2 million businesses, the SME sector is a cornerstone of our economy, fostering employment, growth, and export diversification.
He said that in its endeavor to provide concessional financing to the export-oriented sector, the State Bank Pakistan had announced to extend the financing scheme for renewable energy for next two years till 2024.
The objective of the scheme was to lend support in addressing the dual challenge of energy shortage and climate change through the promotion of renewable energy. It may be mentioned here that Pakistan’s economy is facing the dual challenge of energy shortage and climate change. The inadequate supply of energy has severely impacted the growth of industries.
Similarly, the effects of climate change have been observed in the form of devastating floods, droughts, heat waves and changing weather
patterns. These changes essentially inhibit our ability for sustainable development.
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