ISLAMABAD: The Finance Ministry has attributed likely delay and cost overrun of financial inclusion and infrastructure project designed for risk sharing facility for Small and Medium Enterprises (SMEs) financing by the State Bank of Pakistan (SBP) to Covid lockdown and devaluation of exchange rate.

The Finance Ministry has described the reasons of time and cost overrun, of any, Covid lockdown and stated that work-from-home since March 2020 has slowed down the procurement projects for hiring of consultants.

Original cost of the project was Rs14.318 billion ($137 million), which has been revised to Rs19.6 billion while likely completion data of the project is 31-12-2023 instead of completion date (as per PC-1) 31-12-2022, reflecting a year delay.

The major work done under the project disbursement of Rs91,407 million for line of credit for micro-financing to seven microfinance banks/institutions by the SBP, said Finance Ministry in its revised public sector development programme that also included financial inclusion and infrastructure project.

Ongoing project financial inclusion and infrastructure project in the PSDP for Islamabad and Karachi is being sponsored by the Finance Ministry and the State Bank of Pakistan (SBP) and the Central Directorate of National Saving (CDNS) as the executing agencies.

Scope of the project includes risk sharing facility of the SMEs financing and National Payment Gateway by the (SBP).

The scope of the project also includes increasing access points through automation of the CDNS.

As of November 2020, total 246,807 loans have been disbursed to end borrowers with exceeding set target of 123900 loans.

The SBP and the CDNS have selected five consultants so far and two consultants have submitted report so far.

The project will increase access and usage of digital payments and other financial services for households and SMEs in Pakistan.

At an average of 200,000 micro-loans per year the line of credit will benefit at least four million families over the next 20 years enabling them to create micro enterprises and new jobs using micro loans and number of digital transaction as well as digital payments will increase substantially.

The Finance Ministry has finalised Rs71.665 billion PSDP of the Finance Division for the next fiscal year for ongoing as well as new projects.

The ministry has proposed allocation of Rs7.785 billion for one ongoing scheme of the ministry and Rs61.781 billion for the ongoing schemes of the provincial projects and Rs2.199 billion for the two new schemes in the budget for the next fiscal year (2021-22).

Copyright Business Recorder, 2021