KARACHI: A collateral-free financing scheme introduced by Pakistan’s central bank is expected to solve the liquidity problems of around 10 million Small and Medium Enterprises (SMEs) in the country, traders and a financial expert said on Friday.
The State Bank of Pakistan (SBP) this week rolled out an innovative initiative to improve access to finance for SMEs that cannot offer collateral or security to banks.
Under the scheme, titled ‘SME Asaan Finance or SAF,’ the government will provide risk coverage of 40-60 percent to selected banks against losses, depending on the size of loans.
A majority of SMEs in the informal sector are currently borrowing in cash at a minimum 25 percent interest rate due to several reasons, including higher loan losses, high-cost bank finance models, less use of appropriate technology for SME finance and a lack of acceptable security, according to the SBP.
Union of Small and Medium Enterprises (UNISAME) President Zulfikar Thaver appreciated the SBP’s new initiative, calling it the fulfilment of a long-standing demand by SMEs.
“This is indeed a very big step to facilitate the sector,” Thaver said. “This move will help some 10 million SMEs, including farmers, in playing a vital role in the national economy.”
SMEs were previously entitled to get only a Rs100,000 loan on the provision of security or collateral, which was later increased to Rs1 million.
“The collateral-free loans will enable thousands of small traders to get financing which is their right,” Thaver said.
The UNISAME president said SMEs were the backbone of the country’s economy and a major contributor to the export sector. “With the financing made available, the exports are expected to boost,” he told Arab News.
“This risk cover will be 60 percent for small loans up to Rs4 million, 50 percent for midsize loans from above Rs4 million to Rs7 million, and 40 percent for relatively larger loans of Rs7 million to Rs10 million,” the central bank said about the new scheme.
Pakistani SMEs play a key role in the national economy and are estimated to contribute 40 percent to the gross domestic product (GDP) and 25 percent to export earnings. Despite this, small businesses find it difficult to access bank finance as SME financing stood at Rs444 billion on March 31, or only 6.6 percent of the total private sector credit, according to the Small and Medium Enterprises Development Authority (SMEDA) and SBP.
Under the new scheme, the central bank will provide refinancing for three years to selected banks. Banks will get refinancing from SBP at 1 percent per annum and extend financing to SMEs at the end-user rate of up to 9 percent per annum, which is very attractive compared to informal finance costs, according to SBP, which has also added Shariah compliant features to the SAF scheme to accommodate financing needs of faith-sensitive borrowers.
Some traders say the 9 percent interest rate being offered is still high.
“The interest rate is high and if the process is done through banks it would be difficult for small businesses to get financing,” Iftikhar Ghani Vohra, the convener of the Federation of Pakistan Chambers of Commerce and Industry’s central committee on SMEs, told Arab News.
Vohra said the FPCCI committee was studying the scheme and would present a detailed review at a later date.
Samiullah Tariq, a research director at Pakistan-Kuwait Investment Company, said the relatively cheap financing rates would provide working capital to small businesses, which may ultimately enhance productivity.
“This will help small businesses with liquidity for their working capital, expansion, vehicles and generators,” he said, “and will improve supply chain and productivity.”
Pakistan’s new collateral-free financing scheme to benefit 10 million small businesses — traders
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Pakistan’s new collateral-free financing scheme to benefit 10 million small businesses — traders
- Majority of small businesses that do not have collaterals currently borrow at a minimum 25 percent rate
- Central bank says the government will cover risk for small loans up to 60 percent under ‘SME Asaan Finance’ initiative
Four people arrested after Pakistani woman’s dismembered body found in Punjab
- Zara Qadir, who lived with her in-laws, was reported missing by her father earlier this month
- Police say her mother-in-law, other relatives have been arrested and have confessed to the crime
ISLAMABAD: Pakistani police said on Monday they have arrested four family members accused of murdering a 30-year-old woman in Daska, located in Punjab province’s Sialkot district, in a case highlighting the prevalence of domestic violence in the country.
Zara Qadir, reported missing by her father on November 11, was married to Qadir Ahmed, a resident of Kotli Meeran in Daska tehsil, four years ago.
According to the complaint lodged with the police, the couple had a two-year-old son who lived with his mother while his father worked abroad. Zara herself was residing with her in-laws and had complained of violence and mistreatment by her relatives.
Speaking to Arab News, a Sialkot police spokesperson, Malik Waqas Ahmed, said the victim’s mother-in-law, sister-in-law, and two other relatives were arrested after Zara’s dismembered body was found in two sacks disposed of in a drain.
“All four individuals involved have been arrested,” he said. “They are Sughran Bibi, Zara’s mother-in-law, Yasmeen, her sister-in-law, Abdullah, who is Yasmeen’s son, and Naveed, a relative from Lahore.”
“They have confessed to the crime, and the murder weapon has been recovered,” he added. “They are currently on physical remand for further investigation.”
Ahmed said Zara’s husband returned to Pakistan soon after the incident, though his role in the murder has not been established.
The brutal killing is a stark reminder of the enduring issue of domestic violence in Pakistan, where societal taboos and weak enforcement of laws leave many women vulnerable to abuse.
The suspects allegedly acted out of personal grievances caused by financial matters and familial disputes.
Police are continuing their investigation to establish the full motive behind the crime, saying the woman’s in-laws also accused her of practicing witchcraft, claiming she was bringing hardships to the family.
Cases of violence against women often go unreported in Pakistan, where cultural norms discourage victims from seeking legal recourse.
Rights groups have frequently called for stronger enforcement of existing laws to protect women and ensure accountability for perpetrators.
Pakistan win toss, bat first in final T20 against Australia
- Salman Ali Agha leads Pakistan as tourists rest skipper Mohammad Rizwan
- Left-arm pacer Jahandad Khan makes debut as Pakistan try to avoid whitewash
HOBART, Australia: Pakistan won the toss and elected to bat in the third and final Twenty20 game against Australia on Monday.
The tourists rested captain Mohammad Rizwan with Salman Agha to lead in Rizwan’s absence.
Haseebullah Khan returned to the lineup, while Babar Azam opened the batting with Sahibzada Farhan.
Left-arm pace bowler Jahandad Khan made his debut, replacing Naseem Shah.
For the third successive game, Australia kept faith in the same playing XI.
The hosts had a 29-run win in a rain-shortened seven-overs-a-side match in the first T20 at Brisbane, before fast bowler Spencer Johnson grabbed a career-best 5-26 and propelled Australia to a 13-run win to clinch the three-match series with a game to spare on Saturday.
Pakistan won the preceding ODI series 2-1.
Squads:
Australia: Matthew Short, Jake Fraser-McGurk, Glenn Maxwell, Tim David, Marcus Stoinis, Josh Inglis (captain), Aaron Hardie, Nathan Ellis, Xavier Bartlett, Spencer Johnson, Adam Zampa.
Pakistan: Babar Azam, Sahibzada Farhan, Haseebullah Khan, Usman Khan, Salman Agha (captain), Irfan Khan, Abbas Afridi, Shaheen Shah Afridi, Jahandad Khan, Haris Rauf, Sufiyan Muqeem.
Pakistan says Islamabad, Washington have ‘unique opportunity’ to revitalize partnership under Trump
- Ties between Islamabad and Washington have just started to warm after years of frosty relations
- Planning Minister Ahsan Iqbal says Pakistan desires enhanced partnership in economy, education, health
ISLAMABAD: Pakistan’s Planning Minister Ahsan Iqbal said on Monday that Washington and Islamabad have a “unique opportunity” to revitalize their partnership and tackle global challenges together under a new administration headed by President-elect Donald Trump, state-run media reported.
Ties between Islamabad and Washington, once close allies, have just started to warm after many years of frosty relations, mostly due to concerns about Pakistan’s alleged support of the Taliban in Afghanistan. Pakistan denies it supported the group.
Relations strained further under the government of former prime minister Imran Khan, who ruled from 2018-22 and antagonized Washington throughout his tenure, welcoming the Taliban takeover of Afghanistan in 2021 and later accusing Washington of being behind attempts to oust him. Washington has dismissed the accusations. Shehbaz Sharif’s government, now in its second term, has tried to mend ties but analysts widely believe the United States will not seek a significant broadening of ties with Islamabad in the near future but remain mostly focused on security cooperation, especially on counterterrorism and Afghanistan.
“Addressing a USAID event in Islamabad today, he [Iqbal] stated that the two countries have a unique opportunity to revitalize their partnership and adapt to the needs of a rapidly changing world, with a new US administration taking the helm,” Radio Pakistan said in a report.
The planning minister spoke about Pakistan’s desire to strengthen relations with the United States in key sectors such as economy, climate change, science and technology, agriculture, education and health.
The minister said that the US remains one of Pakistan’s largest trading partners, with trade exceeding $6.5 billion between the two countries in 2023. He said Pakistan’s key exports to the US include textiles, surgical instruments and IT services which contribute significantly to the country’s economy.
“He however emphasized that there is a vast untapped potential for growth,” the state broadcaster said. “He said the trade relations will not only create jobs and foster innovation but also enhance economic resilience.”
Iqbal said that while bilateral relations between Pakistan and the US have flourished, both nations need to respect each other’s sovereignty and work together constructively to address shared challenges.
“Iqbal said Pakistan-US relationship remains critical to addressing global challenges and achieving regional stability,” Radio Pakistan said.
Pakistan’s Defense Minister Khawaja Asif earlier this month signaled Islamabad’s intentions to collaborate with the new US administration where its interests were aligned. However, he cautioned that cooperation could be strained if interests diverged or Washington persisted in supporting wars in the Middle East.
Trump is widely regarded as an unpredictable leader, with analysts worldwide assessing the potential impact of his return to the top US office on global affairs. However, the Pakistani defense minister praised him during Geo TV’s special election transmission this month for promising to end conflicts around the world after assuming power in Washington.
Pakistani banks start receiving Hajj 2025 applications
- Process to receive Hajj applications to continue till Dec. 3, says religion ministry
- Pakistani pilgrims can pay fees in installments, as per the country’s new Hajj policy
ISLAMABAD: Around 15 designated Pakistani banks have started receiving applications for the upcoming annual Hajj pilgrimage, Pakistan’s Religious Affairs Ministry said on Monday, with the process set to continue till Dec. 3.
Pakistan’s religious affairs minister last week announced the country’s Hajj 2025 policy, according to which pilgrims can pay fees for the annual Islamic pilgrimage in installments for the first time.
The first installment of Hajj dues, amounting to Rs200,000 ($717), must be deposited along with the Hajj application under the government scheme, while the second installment of Rs400,000 ($1,435) must be deposited within ten days of the balloting. The remaining amount must be deposited by February 10 next year.
“Fifteen designated banks in the country have started receiving Hajj applications from today, Nov. 18, and the process will continue till Dec.3,” Muhammad Umer Butt, a spokesperson of the religion ministry, told Arab News.
Next year’s Hajj under the government scheme is expected to range between Rs1,075,000 ($3,858) to Rs1,175,000 ($4,217), while an additional cost for the sacrifice will be Rs55,000 ($197.43).
“This year, the government’s Hajj scheme has been allocated a quota of 89,605 seats, with 5,000 reserved for the sponsorship scheme for overseas Pakistanis while the remaining seats will be allocated to the private Hajj scheme,” Butt confirmed.
The Hajj sponsorship scheme was introduced by the government last year, allowing overseas Pakistanis to apply for Hajj or sponsor someone in Pakistan for the journey by paying in US dollars. In return, the applicants would not have to participate in the balloting process for the pilgrimage.
Butt said the total amount for the sponsorship scheme’s basic package is $4,225, adding that if a pilgrim opts for a sacrificial animal, an additional $200 will be charged. The spokesperson said the performance of hundreds of bank branches will be directly monitored by the religion ministry’s dashboard to ensure convenience for intending pilgrims.
“Women pilgrims will be able to depart without Muharram with a reliable group with the permission of their guardian,” he said. “People with serious or complicated illnesses will not be allowed to perform Hajj and advanced-stage pregnant women, as well as children under 12 years of age, will also not be permitted to travel for Hajj.”
He said the government’s Hajj package includes airfare, accommodation, food, training, transportation and vaccinations for pilgrims, adding that applicants will be guided regarding the Hajj process through the Hajj helpline, website, mobile app and government’s official social media accounts.
Saudi Arabia has allotted Pakistan a total quota of 179,210 pilgrims for the upcoming Hajj. While announcing the Hajj 2025 policy last week, Pakistan’s Religious Affairs Minister Chaudhry Salik Hussain said preference would be given to those going for the pilgrimage for the first time while under the new policy.
“The traditional long package for the official Hajj scheme will cover 38 to 42 days and the short package will cover 20 to 25 days,” Hussain had said.
Under the new Hajj policy, the government’s quota will be allocated through computerized balloting, with 1,000 seats reserved for hardship cases and 300 for laborers or low-income employees registered with the Workers Welfare Fund or the Employees Old-Age Benefits Institution.
Pakistan invites Chinese companies to invest in renewable energy to cut reliance on fuel imports
- Pakistan’s envoy to China says country has natural advantage for renewable energy resources with over 1,000 km coastline
- Pakistan has suffered from an energy crisis stemming largely from gap in country’s energy supplies and electricity demand
ISLAMABAD: Pakistan’s ambassador to China has invited Chinese companies to invest in the country’s renewable energy and offshore wind sectors, state-run media reported on Monday, as Islamabad seeks to cut its reliance on expensive fuel imports amid its prolonged energy crisis.
Pakistan has suffered from an energy crisis that stems largely from a gap in the country’s energy supplies and electricity demand, with the South Asian country’s reliance on expensive energy imports drains its resources and triggers inflation.
According to National Electric Power Regulatory Authority’s (NEPRA) 2022 yearly report, Pakistan’s total installed power generation capacity is 43,775 MW, of which 59 percent of energy comes from thermal (fossil fuels), 25 percent from hydro, 7 percent from renewable (wind, solar and biomass) and 9 percent from nuclear energy resources.
“Pakistan’s Ambassador to China, Khalil Hashmi has said that Pakistan has a natural advantage for renewable resources of energy with its long coastline of over one thousand kilometers,” Radio Pakistan reported. “He invited Chinese investors to explore the opportunities available in Pakistani offshore wind industry.”
The Pakistani envoy was speaking at a seminar titled “High-Quality Development of Offshore Wind Power Supply Chain” at the Chinese city of Fuzhou, Radio Pakistan said.
He appreciated China’s rapid advancements in the offshore wind industry sector, underlining the need for enhanced bilateral cooperation by strengthening technology exchanges, infrastructure development and regulatory support, the state broadcaster said.
Pakistan’s power minister last month met his counterpart from Iran and Chinese energy officials to discuss enhanced cooperation in cross-border energy on the sidelines of the Third Belt & Road Ministerial Conference held in Qingdao, China in October.
The Pakistani minister also held separate meetings with Yao Huan, vice president of Power China and Ni Zhen, the general manager of Energy China, in Qingdao. During the meeting, Leghari conveyed Pakistan’s desire to modernize power dispatch and transmission systems, aimed at cutting lines and other losses, the power ministry had said.
