SBP governor asks banks to lend more to SMEs

State Bank of Pakistan (SBP) Governor Tariq Bajwa Monday asked banks to focus on more financing to Small and Medium Enterprises (SMEs) for higher GDP growth. Addressing a flag hoisting ceremony at SBP Karachi Headquarters on independence day Monday, Bajwa said ahead of economic growth there is need for improving financing to SME and agricultural sector as these two sectors can create new employment opportunities and play a vital role in enhancements of exports.
"The SBP has already taken several steps, including issuance of separate prudential regulation and credit guarantee schemes to promote the SME sector," he added. Governor SBP said, however, there is still need to find new innovation for promotion of SME and agricultural financing particularly to small farmers. Agri financing has already increased 80 percent during the last four years and presently banks have some 57 percent share in overall agricultural financing demand. He also appreciated banks for achieving agricultural financing target during the last fiscal year, however, still there are some hurdles in promotion agricultural loans and SBP is making all efforts to remove these hurdles.
He said that as presently the interest rate is at historical lower level there are a lot of opportunities for the private sector to get cheap financing. With lower interest rate lending to private sector has already increased, which shows improvement in the economic growth.
He said that Pakistan's banking system, which is internationally recognized and secured, is fulfilling all the requirements of the economy. Banks' performance cannot be declared efficient until they increase their services as per growing economic requirements. The Governor SBP said in his first meeting with presidents of banks, they were asked for maximum facilities to customers. In addition, the SBP is also striving for banking services in rural and remote areas. Earlier, the Governor SBP hoisted the national flag at the SBP building and appreciated the efforts of SBP employees for the country.