APBF suggests soft financing for SMEs

ISLAMABAD
The All Pakistan Business Forum (APBF) has asked the government to announce soft financing with minimum possible markup and without any collateral for SMEs in the upcoming budget 2024-25 to support them in line with the rest of the world, which has been providing loans at very nominal interest.
The APBF office-bearers in their Board meeting forwarded several recommendations to be incorporated in the federal budget so that the small industry could deal with the challenges posed by the present economic crisis, saying mere statements would not work unless solid measures are taken by the government, including a sizable reduction in fuel prices, bringing down key policy rate to single digit, regionally competitive energy rates and substantial cut in duties and taxes.
It is unfortunate that the State Bank, in August 2017, had introduced a financing scheme for Small and Medium Enterprises, enabling them to get loans without collateral but it was never implemented in its true spirit.
The scheme was launched to improve the SMEs’ access to finances in collaboration with the government aimed at enabling the businesses that cannot offer security or collateral to access bank finance.
The APBF meeting was held here with a view to deliberate the federal budget 2024-25 and called for concrete steps to keep industrial wheels running, especially of SMEs, saving the livelihood of millions of workers associated with the small and medium industries.
The APBF President Syed Maaz Mahmood urged the central bank to announce a soft loan with minimum mark-up rate, especially for SMES to bailout their struggling businesses.The forum called for significant cuts in import duties and waiver of sales tax, income tax and additional income taxes, which are still being charged in this time of grave crisis.
Maaz Mahmood asked the government to take concrete steps to keep the industrial wheels running especially of SMEs, to save the livelihood of millions of workers associated with the small industries.
The APBF Chairman Ibrahim Qureshi said that we should keep our focus on support for cash flow management for SME sector and the government may prioritize its incentive preferences under the growth and importance for the economy. He suggested that the authorities should reduce sales tax to at least 10% to improve demand generation, besides announcing interest-free loans to pay employees’ salaries.
The APBF President said that to save the economy from the impacts of the slow growth, the government should announce special incentives for a cash-strapped small and medium industry, which represents more than 90% of around 3.2 million business enterprises in Pakistan, contributing 40% to GDP, employing more than 80% of non-agricultural workforce, and generating 25% of export earnings.