Refinance scheme: SBP spells out process for availing working capital financing

The State Bank of Pakistan (SBP) has described the process for availing working capital financing under the refinance scheme for small enterprises and low-end medium enterprises. According to a SBP circular, as per the process for availing refinance under the scheme, after allocation of limit, participating financial institutions (PFIs) will approach respective office of SBP BSC (Bank) for activation of the limit. A PFI will submit WC I (Undertaking to be submitted by bank/DFI) and WC II (Demand Promissory Note to be submitted by bank/DFI) for this purpose equivalent to its allocated limit amount.
A PFI will also indicate the amounts it intends to draw from various offices of SBP BSC (Bank) within the overall allocated limit. These documents will be required every time limit is allocated/renewed/revised. After loan disbursement to the borrowers, PFIs will claim refinance against the same through WC III (Refinance Application Form). Borrower's Undertaking (WC IV) will be required to be submitted along with refinance application form.
The Refinance Scheme for Working Capital Financing of Small Enterprises and Low-End Medium Enterprises was launched in December last year as enhancing access to finance for small and medium enterprises (SMEs) is one of the priority areas of the State Bank. Therefore, in an effort to increase the flow of credit to SMEs, a refinance scheme for meeting the working capital requirements of select sectors of small and low-end medium enterprises was launched.
Under the scheme maximum financing tenor under the scheme is one year and all small enterprises (SEs) as defined in SBP's Prudential Regulations (PRs) for SME financing are eligible under the scheme. Medium enterprises (MEs) with annual sales of up to Rs 300 million will be eligible under the scheme. Maximum financing limit for MEs under this scheme is Rs 50 million.