Islamabad: The government on Wednesday (December 15) launched a new Small Medium Enterprise (SME) strategy 2021-25 providing collateral-free loans to 5 million enterprises, according to news reports. Under the new policy, SMEs will be able to obtain a collateral-free credit facility of up to PKR 10 million for registration, tax simplification, credit access, and land provision.
Read: SBP announces ‘SME Asaan Finance’ or SAAF scheme for collateral free financing
According to the policy documents, the loan facility will help one of the major contributors to Gross Domestic Product (GDP) of up to 40% and makes 25% of the export industry. The government has set up a total credit facility of PKR 30 billion for SMEs’ loans and credits. In this regard, the government has classified the SME sector into three groups based on the level of risk involved: Low Risk, Medium Risk, and High Risk. All SMEs will have access to different types of credits based on the categories they are assigned to. In unveiling the policy, Minister for Industries and Production Khusro Bakhtiar stated that many provisions have been introduced to the policy to improve the cost of doing business and to lessen the time to launch businesses. This includes the ‘Zero Time to Start-up Policy’ and the ‘Inspector-Less Inspection Regime.’
Read: Govt working on policy, other measures to develop SMEs
The former policy will not need a No Objection Certificate (NOC), while the latter strategy would limit inspector harassment to simplify corporate activities. Moreover, it was also said that the policy has been approved by the federal cabinet while the final notification will be issued by the Ministry of Industries and Production in the coming days.