LAHORE: Small and Medium Enterprises Development Authority (Smeda) Chief Executive Officer Muhammad Alamgir Chaudhry, addressing a consultative workshop jointly organised by UNIDO and Smeda on “Need of a Credit Guarantee Scheme for SMEs”, said that the low lending for Small and Medium Enterprises (SMEs) in Pakistan is causing slow growth of the sector.
The workshop was also addressed by State Bank of Pakistan Additional Director Imran and UNIDO Project Coordinator Mukesh Kumar.
The Smeda CEO said that currently only 6% of total formal lending by financial institutions is being made by the banks in Pakistan. “Whereas, SME lending in our neighbouring countries is around 30% of the total lending of their banking industry,” he added.
Alamgir pointed out 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.
The SBP Additional Director shared his experience of having one Credit Guarantee Scheme, which is being managed by SBP. He said that there is need of many such schemes in Pakistan.
However, 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.
