KARACHI: The State Bank of Pakistan has introduced ‘SME Asaan Finance’ (SAAF) to improve access to finance for Small and Medium Enterprises (SMEs).

The aim is to enable businesses that cannot offer security/collateral to access bank finance. SAAF is a refinance and credit guarantee facility that is aimed at assisting SMEs that are credit worthy but are still unable to access finance as they cannot offer collateral to banks.

This initiative is a game-changer for Pakistan’s SMEs as the majority of the industries are Micro, Small, or medium enterprises.

In the case of the auto industry, the volumes are increasing. While the cost of doing business and bottlenecks are also increasing i.e. in the supply chain, energy, HR, etc., hence investing in technology, cash in hand, or trying to grow the business is becoming a hurdle for entrepreneurs.

Operating expenses such as rent, leases, and payments to suppliers can be difficult for manufacturing businesses mainly because of extended credit terms. SMEs have faced multiple challenges in getting credit from Banks mainly due to the non-availability of collateral.

Mashood Ali Khan, Director of Mehran Commercial Enterprises said: “My work towards the growth of the industry has a wide focus on assisting Micro, small and medium companies to grow through different avenues especially capacity building and awareness. To understand how SMEs can take advantage of this policy, I organized a Seminar on this scheme at the premises of Mehran Commercial Enterprises for the auto industry as well as the Special Economic Zones especially Korangi Creek Industrial Park”.

The Seminar was a 2-hour session, where Syed Muhammad Raza Hussain VP - Product Development SMEs Meezan Bank explained how we could take advantage of this scheme and what are the pre-requisites.

Raza explained to the CEOs /Heads of Accounts department who were present in the seminar that they can avail financing up to PKR 10Mn for procurement of Raw Materials, manufacturing of goods, and for purchase of Light Commercial Vehicles. The availability of this scheme is for 3 years.

Copyright Business Recorder, 2022