KARACHI: The State Bank of Pakistan (SBP) in a statement released on Tuesday announced that it has extended the deferment of principal amount until September 30.
Under this facility, businesses and households can request to defer their loans and advances for a period of one year, while continuing to service the mark-up amount.
The decision has been made in light of the fact that the Covid-19 pandemic is continuing to stress the cash flow of small and medium sized businesses and households, according to the SBP.
Accordingly, this facility will be available to Small and Medium Enterprise (SME) financing, enterprise financing, consumer financing, housing finance, agriculture finance and micro financing only.
The facility will not be extended to corporates and commercial borrowers, considering that a significant amount of their loans and advances have already been deferred.
“It is expected that more businesses and households, who were not able to avail the facility, will benefit from this extension,” the SBP said.
Previously on March 26, the SBP, along with the Pakistan Banks Association (PBA), had announced measures to help businesses during the Covid-19 crisis.
One key measure was the deferment of principal amount of loans and advances by banks and Development Financial Institutions (DFIs). Under this facility, businesses and households could request to defer their loans and advances for a period of one year, while continuing to service the mark-up amount.
The deferment of principal was not to affect borrower’s credit history, and the facility would not be reported as restructured in the credit bureau’s data.
As of July 3, banks have deferred Rs593 billion of principal amount of loans for over 359,000 borrowers. Around 95 per cent of the scheme’s beneficiaries have been small borrowers including SMEs, consumer finance, and microfinance.
