LAHORE: Formal lending for Small and Medium Enterprises in Pakistan is much less than the actual requirement, hindering rapid growth of SMEs in the country.
Chief Executive Officer of the Small and Medium Enterprises Development Authority (SMEDA) Muhammad Alamgir Chaudhry said while addressing a consultative workshop jointly organized by UNIDO and SMEDA on “Need of a Credit Guarantee Scheme for SMEs”.
The workshop was also addressed by Additional Director State Bank of Pakistan, Imran and Project Coordinator of UNIDO Mukesh Kumar.
The SMEDA CEO said, currently only 6 percent of total formal lending by financial institutions is being made by the banks in Pakistan.
The SME lending in our neighboring countries is around 30 percent of the total lending of their banking industry, he added and emphasized that credit guarantee would be very helpful for easy access to finance for those SMEs which face difficulty in getting loans because of strict requirement of collateral to be demanded by the banks.
He assured that SMEDA would make all efforts with the support of UNIDO to take this initiative to appropriate forums to get the scheme launched at the earliest possible. Additional Director SBP, Imran shared experience of having one Credit Guarantee Scheme, which is being managed by the SBP.
The workshop developed a common consensus about the need of Credit Guarantee Schemes in Pakistan despite difference of opinions on the framework and structures the proposed scheme.
