FPCCI rejects SBP’s 9pc interest rate for SMEs
Pakistan Federation of Chambers of Commerce and Industry (FPCCI) President Mian Nasser Hyatt Maggo expressed dismay at the interest rate of up to 9% under the Asaan SME Finance Program (SAAF ) of the State Bank of Pakistan. However, he noted, the 9% lending rate makes it expensive for small businesses, as well as unproductive and unfavorable.
As a welcome development, SBP has selected eight banks to receive funding under the SAAF program, but it does not make economic and business sense to allow these eight banks to charge up to 8pc in addition to the cost of lending. of 1pc from SBP, said Mian Nasser Hyatt Maggo. .
For SMEs, Mian Nasser Hyatt Maggo argued that the SAAF plan should not have an interest rate higher than 3.0%, which is 1% of SBP and 2% of banks’ margin.
In the post-pandemic context, the head of the FPCCI said that no SME in the world can acquire capital at 9pc and repay it without going bankrupt. This is not all: the SBP has adopted an unfavorable and discriminatory position towards small businesses by setting the maximum interest rate within the framework of its TERF program at 3% for large companies and groups of companies, has he declared.
Iftikhar Ghani Vohra, Head of FPCCI’s Central Position on SMEs, said based on responses from all over Pakistan, he can say that SMEs are not happy with the excessive interest rate; 9 percent will make the SAAF program unsustainable for them.
In a meeting with SBP officials in mid-September, Iftikhat Ghani Vohra said his committee had expressed his concerns in great detail. No interest rate changes were announced despite FPCCI concerns.
According to Mian Nasser Hyatt Maggo, he does not agree with SBP’s statement that all stakeholders have been included in the SAAF regime, as the FPPCI’s proposal was not considered. According to him, the FPCCI is Pakistan’s main representative body for all small and medium enterprises (SMEs), chambers and associations, and is therefore the most important stakeholder in shaping policies that affect SMEs.