Karachi: According to news reports, the State Bank of Pakistan (SBP) declared on Wednesday (November 03) that eight banks are ready to issue loans under the SME Assan Finance (SAAF) programme for collateral-free loans to Small Medium Enterprises (SMEs).

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Habib Bank Ltd, United Bank Ltd, Allied Bank Ltd, Meezan Bank Ltd, Bank Alfalah Ltd, The Bank of Punjab, JS Bank Ltd, and The Bank of Khyber are among the eight institutions that have expressed interest in providing SAAF loans so far. Commercial banks would give SMEs with loans of up to PKR 10 million on no-collateral terms under the scheme.

According to the details, SBP Governor Reza Baqir stated that the central bank would issue loans to commercial banks at 1%, which they would then refinance to SMEs at a maximum rate of 9%, rather than the usual rate of 25% to 50%. These loans will be made available without the need for collateral or a track record. Human development, human resources, technology, and processes will all benefit from the loans granted.

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SBP has also introduced loan volume bands, with a 60 percent central bank risk guarantee on a loan of PKR 4 million, 50 percent on a loan of PKR 5 million, and 40 percent on a loan of PKR 10 million.

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