The Sindh Enterprise Development Fund (SEDF) has so far provided a subsidy of Rs 500 million for 30 projects in the interior parts of the province for upgrading their technology and bringing in value addition, the fund’s chief executive Mehboobul Haq said in an interview on Tuesday. “Most of these projects are in rice milling, dairy farming and dates processing sectors,” he added. He said the average worth of these projects is around Rs 100 million and the SEDF has also facilitated buyback arrangements for their products. “The SEDF has a fund of Rs 1 billion for providing financial subsidy to projects and more funds are in the pipeline. We are holding seminars to create awareness about this facility and we are also directly approaching potential entrepreneurs who are still using old technologies and skills,” he explained.
Haq said this fund will help in reducing capital cost of the project and providing them an edge over others. “For example, in rice milling, we are encouraging millers to use new technology for polishing and processing to reduce broken percentage of rice. We are also advising them to use the rice husk for value addition to reduce their increase their profitability,” he added. He said financial assistance will be available for three years and the SEDF will pay 100 percent Karachi Interbank Rate (KIBOR) for capital cost and up to 50 percent for working capital.
“This means the selected project will not pay the mark up on bank loan for three years and pay 50 percent on the credit borrowed as working capital,” he noted. He said the total monetary value of the SEDF interest subsidy shall not exceed Rs 43 million while the financial support shall not exceed projects valuing Rs 172 million he added. “The SEDF does not directly give money to the project. We provide the amount of financial subsidy to banks on disbursed credit. This means that this project should be bankable and the needy entrepreneur should get the loan first and then seek for the financial subsidy,” he added.
He said currently, agro-based, processing, mining and green-field projects qualify for the SEDF financial subsidy. The include agro-processing, dairy, livestock, poultry, fisheries, floriculture, storage and cold chain, mining and processing of minerals and energy (use of solar, bio-gas and wind as a source of energy). Responding to a question, he said the main objective of providing subsidy on capital cost is to preserve the capital base of the company.
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