The Sindh government, in collaboration with the State Bank of Pakistan (SBP), has offered interest subsidy of 6.25 percent and credit risk sharing facility of up to 30 percent against the long-term loans to be extended to the rice-husking mills in the province.
The loans would be provided by the banks under the existing SBP Refinancing Scheme, reported the central bank Tuesday. It said these additional incentives, being offered by Sindh Enterprise Development Fund (SEDF), would encourage the rice mills to carry out BMR of their units so as to reduce their losses and improve the quality of their products. The improved profitability projections with the availability of additional incentives under the scheme would also encourage potential Small and Medium Enterprises (SMEs) to establish new rice-husking units in the province.
Dwelling on the scheme’s broad features, the State Bank said mark up rate for the facility shall remain the same, nine percent, for financing up to five years as applicable under SBP’s Refinance Facility.
However, it said, the end-user rate would be 2.75 percent per annum only, i.e. the difference of 6.25 percent (SBP share) would be borne by the SEDF.
The SBP said the banks would be offered a credit guarantee cover of 30 percent against their outstanding loans under the facility.
As mentioned, the cover would be provided on the strength of financial support extended by SEDF. The facility shall be available against the loans granted up to the period of five years. The maximum loan size for a single borrower shall be Rs 10 million.
The banks, which have already obtained refinance limits under SBP’s Refinance Facility for Modernization of SMEs, may now apply for the guarantee and subsidy limits under this scheme, said an SBP circular issued to all banks Tuesday.
Sindh govt, SBP announce mark up subsidy, guarantee facility for rice millers
