KARACHI: To revive the economic activities in flood-hit areas, the State Bank of Pakistan (SBP) has launched a concessional loan scheme of Rs10 billion.
As per the SBP loan scheme, the banks will charge 8 per cent mark-up per annum from the farmers and Small and Medium Enterprises (SMEs) of flood-affected areas against their financing for production, working capital loans and advances.
According to a circular issued by the SBP, refinance under the scheme will be provided to banks at 5pc per annum. The borrowers will be charged a maximum spread of 3per cent. However, credit to SMEs and farmers will be available at 8pc per annum.
All categories of farmers ie owners, owner-cum-tenants and tenants of the areas where floods destroyed their crops will be eligible for agricultural loans under the scheme. Principal amount of loans under the scheme will have to be repaid on agreed date between bank and the borrower within a maximum period of one year.
The State Bank of Pakistan reported that 45 districts covering farming area of around 2.4 million acres is flood affected. The scheme will be effective from the date of issuance of this circular and will remain valid only up-to December 31, 2015.
