Islamabad: According to press sources, the government introduced a new Small Medium Enterprise (SME) plan 2021-25 on Wednesday (December 15), providing collateral-free loans to 5 million businesses. SMEs would be able to acquire a collateral-free credit facility of up to PKR 10 million under the new policy, which will be used for registration, tax simplification, loan access, and land provision.
Read More: Government working on policy, other measures to develop SMEs
According to the policy documents, the lending facility will benefit one of the key contributors to GDP (up to 40%) and the export industry, which accounts for 25% of GDP.
For SMEs’ loans and credits, the government has set up a total credit facility of PKR 30 billion. The government has divided the SME sector into three categories based on the level of risk involved: Low Risk, Medium Risk, and High Risk. SMEs will have access to various types of credits depending on the categories to which they are allotted.
Read More: Eight banks on board to provide SME loan under SAAF scheme, according to SBP
Minister for Industries and Production Khusro Bakhtiar noted during the inauguration of the policy that several provisions have been added to reduce the cost of doing business and the time it takes to start a business. The ‘Zero Time to Start-up Policy’ and the ‘Inspector-Less Inspection Regime’ are examples of this.
The former technique will not require a No Objection Certificate (NOC), but the latter will reduce inspector harassment and streamline corporate operations. The policy was also believed to have been approved by the federal cabinet, with the Ministry of Industries and Production issuing the final notification in the following days.
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