The Small and Medium Enterprises Development Authority (SMEDA), under the direction of the Federal Minister of Industries Rana Tanveer Hussain and the Federal Minister of Finance Senator Muhammad Aurangzeb, has launched a move to make SMEs bankable for easy and increased access to finance. As a first step, SMEDA inked a Memorandum of Understanding (MOU) with Askari Bank Limited today at its head office.
The MOU was signed by Mr. Socrat Aman Rana, Chief Executive Officer of SMEDA and Mr. Hussain Ali Haider, Country Head-SME Division Askari Bank Limited at a ceremony held at SMEDA head office. The Signing Ceremony was also attended by Mr. Ashfaq Ahmad, GM of Business and Sector Development Services, Ms. Farah Yasir, DGM-B&SD, Mr. Sheharyar Tahir, DGM-External Relations and Mr. Usman, Assistant Manager of Financial Services from SMEDA. Meanwhile, from Askari Bank, the Country Head of the SME Division was accompanied by Syed Nauman Sajid, Regional Head of SME Central, and Mr. Awais Tahir, Senior Credit Head of SME.
CEO SMEDA Mr. Socrat Aman Rana, while addressing the signing ceremony, said that the Government of Pakistan, top from the Prime Minister to all economy-related ministers, especially the Minister of Industries Rana Tanveer Hussain and Minister Finance Senator Muhammad Aurangzeb, were committed to making SMEs bankable for enhancing SME access to government financing schemes and specialized financial products. He said that despite the higher significance of SMEs to job creation, innovation and economic diversification in Pakistan, private sector lending to SMEs had declined from 8.5% to 6% over the past five years, with the total outstanding portfolio stagnant at PKR 543 billion. He was confident that SMEDA’s plan to evolve in collaboration with the banking industry would significantly increase private-sector lending to SMEs.
Mr Hussain Ali Haider, Country Head of the SME Division of Askari Bank, said we should be able to turn the table for enhancing SME lending in collaboration with SMEDA.
According to the MOU with Askari Bank, SMEDA will utilize its Regional Offices and Helpdesks for information dissemination and awareness creation of concessionary Government Financing Schemes and all Askari Bank SME Products, besides extending its capacity-building initiatives for SMEs in business development, such as accounting and bookkeeping, marketing, technical advice, etc. SMEDA will facilitate SMEs approaching its Helpdesks in the application process for Government Financing Schemes and all Askari Bank SME Products. SMEDA will also share research studies and reports with Askari Bank on matters that interest the bank.
As per the MOU, the Askari Bank will notify SMEDA of its priority sectors and respective lending criteria and may also refer its clients to SMEDA to avail themselves of the facilities provided by SMEDA. In addition, the Askari Bank will disseminate SMEDA’s capacity-building services through its branch network to SME walk-ins.
According to the MOU, SMEDA and Askari Bank will jointly identify a mechanism for facilitating SMEs with access to Government Financing Schemes and other financial products and services for SMEs announced occasionally. Both organizations will nominate contact persons to coordinate activities under this MoU. In addition, it has been mutually agreed that SMEDA and Askari Bank Limited will work jointly to promote business opportunities for small and medium entrepreneurs within the perimeter of their work mandate.
Notably, SMEDA has also planned to take other banks into a loop for entering into MOUs to make SMEs bankable and commercially viable for having credits. CEO SMEDA Mr Socrat Aman Rana, who is moving on the fast track in this regard, will have his next meeting with the Bank of Panjab tomorrow.
