ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the SME Assan Finance Scheme in its session held on Tuesday. The scheme entails the availability of financing for Small and Medium Enterprises, on concessionary rates, which will in turn give a boost to the economy.
Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar chaired the meeting of ECC.
Sources said that the State Bank of Pakistan in consultation with eight banks proposed revised features of the scheme and its budgetary impact.
Risk coverage by the banksÂ
The proposed risk coverage under this scheme up to Rs4 million loan will be 50% instead of 60%.
Similarly, the risk coverage above Rs4 million and upto Rs7 million has been reduced to 40%.
In addition, the risk coverage will be 30% instead of 40% above Rs7 million and upto 10% under the proposed scheme.
Banks Margin
Under this scheme, the bank’s share has been reduced to 6% from 8%, the SBP margin has been increased to 3% from 1% and the end user’s rate under the scheme will be 9%.
Sources said that the amount of guarantees issued under the SME Assan Finance schemes upto June 30, 2022 is Rs7.32 billion and an amount of Rs7.5 million has been released against the claims received.
The total financial impact of the risk sharing facility to the GoP has been worked out to Rs12 billion to be provided to SBP for onward payments to banks over next two years.
Outsourcing of Islamabad International Airport
The Ministry of Aviation has also appraised the ECC that the PM steering committee has proposed to outsource three airports however, it was decided that in the first instance only Islamabad International Airport shall be considered for outsourcing whereas the two remaining airports can be outsourced in light of the experiences and insights gained from outsourcing of IIA.
Sources said that the International Finance Corporation in its inception report highlighted some issues including long outstanding PIA receivables, the uncertain macroeconomic conditions, PCAA concession fee, tariff charges escalation mechanisms, fate of PCAA employees which could hamper the smooth execution of the outsourcing initiatives.
Sources also said that IFC also emphasized upon the need for a service agreement between all these entities performing “reserve functions” and PCAA may not be held responsible for any breach of the agreed performance indicators.
IFC has prepared the State Support Agreement in line with recommendations and some of their concerns which are of an operational nature shall be addressed in the Service Level Agreement at a later stage.
According to the finance ministry, the ECC also approved a summary of the Ministry of Aviation on a state support agreement for the outsourcing of Islamabad International Airport through international competitive bidding.
The ECC considered a summary of the Ministry of Industries and Production regarding Urea fertilizer requirement for Rabi season 2023-24. Considering the recommendations/proposals given by Fertilizer Review Committee (FRC), the ECC decided that the SNGPL based plants i.e. Fatima Fertilizer (Sheikhupura) and Agritech may be allowed to operate beyond 31st August, 2023 till 15th October, 2023.
A summary submitted by Pakistan Atomic Energy Commission regarding the issuance of GoP Guarantee for Chashma Nuclear Power Project Unit -5 (C-5).
The ECC decided to allow the issuance of a gradual sovereign Guarantee for the Chasma C-5 project within the IMF program.
The Ministry of National Food Security & Research submitted a summary for extension of Financial Schemes of Kissan Package 2022. The ECC after discussion allowed extension in time period as per fiscal space available till 31 December, 2023 to Financing Schemes of Kissan Package including Provision of subsidy for interest-free loans for subsistence farmers in flood affected areas, PM’s Youth Business and Agriculture Loan Scheme (PMYBALS), Markup Subsidy & Risk Sharing scheme for Farm Mechanization (MSRSSFM) and Interest Free Loan to landless farmers in the flood affected areas.
The ECC also considered a summary of the Ministry of Industries & Production regarding North Waziristan District (NWD) Single Entity Export Processing Zone. It was decided that Mineral Lease located in Muhammad Khel for an area of 30 Sq. Km (ML – 30) and Exploration Lease located in Manzar Khel for an area of 101 Sq. Km (EL-101) was declared as NWD Single Entity Export Processing Zone under Section 2 (k) of the EPZA Ordinance 1980.
