The State Bank of Pakistan is scaling up financing of small businesses under its Rozgar Scheme so they can pay their salaries and prevent lay-offs.
It will finance up to 100% of wages and salaries of businesses with an average three-month wage bill of up to Rs500 million, it said in a handout May 11.
The Rozgar Scheme is formally called the Refinance Scheme to Support Employment and Prevent Layoff of Workers. It aims to create incentives to prevent layoffs under the coronavirus lockdown. It targets small and medium enterprises that employ a large number of people.
Recently it announced a risk-sharing facility and allowed corporate guarantees as collateral in the hope they will incentivize banks to extend loans to collateral deficient small businesses. Taking this a step further, it will facilitate middle and large businesses, which employ large numbers of people, to ensure they can pay wages and salaries.
It can be used for the onward payment of wages and salaries for April, May and June. Earlier, 100% financing was available for a wage bill of up to Rs200 million only.
Similarly, for businesses with a three-month wage bill over Rs500 million, the SBP will now finance of up to 75% with a maximum of Rs1 billion. Earlier, 75% of financing was available up to a maximum of Rs375 million and 50% up to a maximum of Rs500 million.
These changes are applicable immediately. Businesses that had already availed lower financing due to applicable limits can now get the additional financing on the basis of the revised criteria.
All details available here: http://www.sbp.org.pk/smefd/circulars/2020/CL10.htm
From the launch of the scheme till May 8, banks have received requests of more than 1,440 businesses for financing of over Rs103 billion for wages and salaries to around one million employees whose jobs have been supported because of this scheme. Of this amount, banks have already approved financing of Rs47 billion for 500 companies covering over 450,000 employees.
A complete list of measures taken by the SBP to support the economy and public health is available at: http://www.sbp.org.pk/corona.asp.
If end-users would like further information or if they are experiencing issues with commercial banks in benefiting from these measures, they can contact a dedicated COVID-19 SBP team by email at email@example.com or by phone at 111-727-273.