Advisor to the Prime Minister on Finance Dr Abdul Hafeez Shaikh on Thursday formally launched the Secured Transactions Registry (STR), saying that it would broaden the scope of assets and help banks to expand their lending portfolios.
Speaking on the occasion, Shaikh highlighted that Micro, Small and Medium Enterprises (MSMEs) play a vital role in the economic development of the country due to their significant contribution in terms of output, exports and employment.
Particularly, SMEs constitute approximately 90 percent of businesses in Pakistan, employ 80 percent of the non-agricultural labour force and contribute 40 percent in the country's annual GDP.
He noted that despite playing a significant role in economic growth of the country, the SMEs access to formal finance is limited to only six percent of the total financing by the banking sector.
He was optimistic that the launched initiative would prove to be a game changer by improving the access to finance for the MSMEs, agri-borrowers and rural enterprises.
The adviser added that the commencement of the registry will broaden the scope of assets that these underserved segments can offer as a security for availing the finance.
On the other hand, this reform will also help banks to expand their lending portfolios. The operationalization of STR will contribute towards improving Pakistan's score on "getting credit indicator", and in particular raise its global ranking on the World Bank's Doing Business' index.
The launch of STR is yet another millstone achieved by the current government that is a testament to its commitment towards improving financial inclusion, growth of the private sector and ultimately, the economic development of the country, stated Shaikh.
He also appreciated the support offered by the British government, through DFID and Karandaaz, and collaboration between the SECP, the SBP, the Board of Investment and the World Bank for the successful implementation of this reform.
He particularly lauded the commitment demonstrated by the SBP and the SECP teams, and the hard work of the SECP for spearheading this initiative, and its completion within a year of its assignment to the SECP, in March last year.
The Finance Division said in a statement that the STR, established under the Financial Institutions (Secured Transactions) Act, 2016, for registration of security interests/charges created by entities other than companies on their movable assets, has been operationalized by the SECP.
The STR is an electronic register that can be accessed through a dedicated website.
Financial institutions can now file security interests online.
Registration process is fully automated and the registry is searchable by the general public, free of charge.
In her address at the occasion, Annable Gerry acknowledged the efforts of the financial sector regulators for their thought leadership and progressive role.
Dr Shamshad Akhtar also acknowledged the SECP leadership and assured of Karandaz Pakistan's continued support for the SECP's technology projects.
Governor SBP and chairman SECP also spoke on the occasion.
The launching ceremony was chaired by the Advisor on Finance and attended by Governor State Bank of Pakistan (SBP) Reza Baqir, Chairman SECP Aamir Khan, Chairman Board of Investment Atif R Bokhari, Chairperson Karandaz Pakistan Dr Shamshad Akhtar, CEO, Karandaz Pakistan Ali Sarfraz, Department Head of International Development (DFID) Pakistan Annable Gerry, Country Director World Bank in Pakistan Illango Patchamuthu, commissioners SECP Shaukat Hussain and Shauzab Ali.
Later on, according to the Finance Ministry, the adviser also chaired a meeting to deliberate on the contours of a financial assistance package for the small and medium enterprises in the wake of the coronavirus pandemic.
Minister for Industries and Country Director World Bank also participated in the meeting.
The assistance package would explore the possibilities of supporting the small and medium sized enterprises, formal or informal, which are employing five to 30 people but have suffered losses due to the recent lockdown.
The ways and means to support the firms to continue their production and to enable them to pay their fixed costs and support their workers were discussed in detail.
The adviser said that the focus of the scheme should be that the workers attached with these small businesses should not be laid off from their work because of the un-sustainability of the business.
Provision of basic IT-related skills to the smaller businesses was also discussed in the context that such skills and expertise would help the workers as well as the businesses to continue their entrepreneurship in the odd and difficult times.
The meeting agreed that the cooperation of the SMEDA and the Punjab IT Board will be sought to make the package implementable.
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