LAHORE
\nThe Ferozepur Road Industrial Association (FRIA) has asked the banks for lending to priority manufacturing sectors of SMEs to stimulate economic growth and development in the country.
\nThe FRIA senior vice chairman Shahbaz Aslam said that we need to set our primary agenda to strategize and enhance financing and lending to priority sectors to stimulate economic growth and development in Pakistan.
\nHe pointed out the government\u2019s ongoing efforts to promote economic stability, fiscal discipline, and sustainable growth.
\nHe emphasized the critical role of the banking sector in supporting the government\u2019s development agenda and urged the banks to increase financing and lending to priority sectors, namely agriculture and Small and Medium-sized Enterprises (SMEs). He requested the Pakistan Banks to lead a task force comprising representatives from the banking sector, government, and relevant stakeholders, with the primary objective to accelerate financing in the priority sectors and devise actionable strategies to overcome the existing challenges and bottlenecks hindering the growth of these vital sectors.
\nShahbaz Aslam reiterated the FRIA\u2019s commitment to working closely with the banking sector to address the financing needs of priority sectors and ensure the effective implementation of the proposed strategies and initiatives.
\nHe highlighted the SBP\u2019s role in providing regulatory support, policy guidance and financial incentives to encourage banks to expand their financing activities in alignment with the government\u2019s priorities. He said that despite the significant importance, over 5 million SMEs have been facing a huge credit gap, receiving only 7 percent of private sector credit, far below than neighboring countries like Bangladesh (25 percent) and India (18 percent), with the State Bank committing to increase SME credit share to 17 percent by 2023. To achieve this, we must advocate for targeted and fixed SME allocations in concessional financing schemes, particularly those aimed at the export-oriented sector. He proposed the SBP to allocate at least 25 percent of concessional financing, including the Export Finance Scheme, exclusively to SMEs in the export sector. This strategic allocation will not only boost SME sector\u2019s growth but also promote a more inclusive and resilient economy.
\nHe suggested the central bank to review its credit policies by fixing a special quota to finance the small and medium enterprises, as only the large industries have been availing government\u2019s all major concessional export loaning facilities, with very limited financing is left for the SMEs which are the backbone of the economy, contributing around 40 percent to the national gross domestic product (GDP).
\nHe said that the State Bank of Pakistan has launched various policies for the promotion of SME finance, but the required results were still awaited. It was unfortunate that banks were always reluctant to provide financing to SMEs as their financing continued to show negative growth.
\nHe said that the government with a view to help grow the businesses will have to take solid measures to strengthen the industry, especially the SMEs, saving the livelihood of millions of workers associated with the small industries. The government will have to make a visible reduction in markup rate to help grow the businesses, particularly the SME sector, as Pakistan needs millions of jobs annually.
\nWe need to highlight the critical role of Small and Medium Enterprises (SMEs) in driving sustainable economic development in Pakistan. With an estimated 5.2 million businesses, the SME sector is a cornerstone of our economy, fostering employment, growth, and export diversification.<\/p>\n","protected":false},"excerpt":{"rendered":"
LAHORE The Ferozepur Road Industrial Association (FRIA) has asked the banks for lending to priority manufacturing sectors of SMEs to stimulate economic growth and development in the country. The FRIA senior vice chairman Shahbaz Aslam said that we need to set our primary agenda to strategize and enhance financing and lending to priority sectors to […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-397501","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n