New SME policy to provide Rs6 billion for solar, hydro, wind energy projects

KARACHI: The government has made Rs6 billion available at a subsidized rate of 6 percent for renewable energy projects for hydro, solar, wind and biogas categories under the newly launched SME policy on Friday.

State Bank of Pakistan (SBP) document details subsidized loan is going to available for a period of twelve years, reported Dawn. To promote use of solar energy among consumers, the scheme proposes setting-up of small-scale renewable energy projects of less than 1 MW.

The central bank will also launch an innovation challenge fund for finding new solutions to promote SME financing via technology. It will also be partnering with fintech companies and universities to start pilot projects.

Financing for new imported, local plant & machinery and procurement of new generators of up to 500 kVA will be made available at 6 percent for 10 years. SBP suggested Ministry of Commerce should incentivize SME start-ups for exporting their handicrafts and establish a marketplace website for amalgamating these entrepreneurs on one platform.

According to SBP’s policy paper, credit processing for SME loans has been lessened from 30 days to 15 working days, and loan processing time for them has been fixed at 25 working days.

The policy paper stated, “The condition of obtaining insurance for financing up to Rs2 million (previously Rs1m) has been made optional for small-enterprise and medium-enterprise financing.”

SBP aims to raise SME share from 8 percent of private-sector credit to 17 percent and increase number of borrowers from 174,000 to 500,000 by 2020. To facilitate women entrepreneurs in underserved areas, SBP has initiated a credit guarantee and refinance scheme for which financing will be made available for establishing new businesses or expanding current ones.

Refinance rate has been at zero percent, while end-user rate is around 5 percent. And the central bank has made 60 percent risk coverage available against outstanding principal of banks.

This scheme’s financing limit is set at Rs1.5 million for five years and 20 percent limits have been financially allotted to Balochistan.




- Advertisement -
- Advertisement -

Must Read

Senate Standing Committee on Industries and Production calls for protecting customers...

LAHORE: The Senate Standing Committee on Industries and Production, chaired by Senator Khalida Ateeb on Wednesday, has called to protect customers from being subjected...