The central bank Tuesday extended the scope of Credit Guarantee Scheme (CGS) by including the microfinance banks (MFBs) in the list of eligible Participating Financial Institutions (PFIs). The move is aimed at enabling the micro enterprises to benefit from this scheme, the bank said. According to an SBP circular, now MFBs would be able to extend loans from above Rs 150,000 up to Rs 500,000 to micro enterprises for a tenor not exceeding 5 years. The MFBs, which have already obtained prior approval of SBP for undertaking ‘microenterprise’ lending as per AC&MFD Circular No.02 dated March 16 (2012), could apply for allocation of Credit Exposure Limits under the Credit Guarantee Scheme, the regulator said. It may be pointed out that earlier the CGS facility was open to Commercial Banks only. The MFBs would find great comfort in taking credit risks as they now enjoy the risk coverage of 40% on their loans to micro enterprises.
SBP, BoK sign MoU on technical assistance
The central banks of Pakistan and South Korea signed a Memorandum of Understanding (MoU) on cooperation and technical assistance between the two banks, said an official statement Tuesday. The MoU was signed by Governor State Bank of Pakistan (SBP) Yaseen Anwar and Governor Bank of Korea (BOK) Choong Soo Kim in Seoul, the federal capital of South Korea. Signing of the memorandum coincides with the visit of President Asif Zardari to South Korea. The MoU stipulates that the two central banks would share experiences and provide technical assistance in their conduct of central banking business, including monetary management, the payment and settlement systems and foreign exchange reserve management. The agreement lays down the foundations of close cooperation between the two central banks in all areas of mutual interest. The MoU would make a significant contribution in strengthening the close relationship between the two countries.