KARACHI: The State Bank of Pakistan extended its relief package to borrowers availing loans under six refinance schemes, according to a statement released on Friday.
The central bank did so in light of challenges in the economy due to the coronavirus (Covid-19) pandemic. The relief package now applies to six SBP ongoing refinance schemes, including the Long Term Financing Facility (LTFF), the Financing Facility for Storage of Agricultural Produce (FFSAP), the Refinance Facility for Modernization of SMEs, the Refinance and Credit Guarantee Scheme for Women Entrepreneurs, the Refinance Scheme for Working Capital Financing of Small Enterprises and Low-End Medium Enterprises, and the Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons.
Earlier on March 26, the SBP and the Pakistan Banks Association (PBA) announced a relief package intended for households, and businesses, which includes microfinance, SMEs, corporates, commercial, retail, and agriculture. Friday’s step will allow for similar relaxations on concessional refinance schemes.
Under the relief package, loans were provided with preferential terms and conditions to promote growth in priority sectors of the economy. The repayment of the principal amount could be deferred for one year for corporate, consumer, agriculture, SMEs and microfinance sectors.
This relaxation will now also be available for financing of banks and development finance institutions (DFIs) under the SBP’s refinance schemes as well. The complete repayment schedule of the loan will be extended by one year. According to the SBP, the borrowers will, however, continue servicing their mark up during the period of principal deferment.
In case the borrowers are not able to service mark-up payment, banks and DFIs may restructure the loan so that it can go up to one year beyond the existing maximum tenor of the respective scheme.
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