Small and Medium Enterprises Development Authority and the Pakistan Stock Exchange are in collaboration through a Memorandum of Understanding to facilitate SMEs through capacity building and awareness creation to explore equity financing as a means to finance their businesses.

Access to affordable long-term finance is one of the biggest barriers to the development of Small and Medium Enterprises (SMEs). In addition to the most commonly used methods of acquiring finance such as borrowing from friends and family, informal sources from the market, and formal sources through financing institutions, SMEs can also raise capital through enlistment on the Pakistan Stock Exchange (PSX).

Pakistan Stock Exchange has initiated a ‘Growth Enterprise Market’ (GEM) Board to facilitate SMEs to enlist and raise capital for financing their business expansion and growth initiatives. GEM Board is a listing platform aimed at facilitating growth-oriented businesses whether small, medium, or greenfield businesses to raise capital to fund their growth and expansion plans.

For information, please follow the links below:

       

Some useful links for more information:

You may contact SMEDA helpdesk for queries or information, if any, regarding the Credit Guarantee Scheme offered by the State Bank of Pakistan.

Small Enterprises (as defined by SME Prudential Regulations) may be extended financing for a maximum tenor of 5 years and upto the maximum amount allowed under SBP’s Prudential Regulations for Small Enterprises.

Microfinance Banks may extend loans from Rs. 150,000 to Rs. 500,000 to Micro Enterprises for a tenor not exceeding 5 years.

Farmers may be extended financing under the Scheme upto the maximum amount of Rs 2 Million. The maximum loan tenor allowed for the purchase of tractors and other agri loan implements under the Scheme is 5 years. However, the aggregate financing under this category shall not exceed 20% of the total allocated guarantee limit of the bank. For purchase of agri inputs, maximum loan tenor under the Scheme is 3 years.

SMEs will be charged market-based mark-up rate under the Scheme.

However, in cases where SBP has provided a refinancing facility, mark-up rate allowed by SBP to PFIs under the particular facility shall prevail.

60% risk coverage shall be provided for loans extended to: Start-up businesses, Women borrowers, and Small and Rural enterprises operating in under-served areas of the country.

For eligible borrowers, other than those mentioned above, the risk coverage to PFIs shall be linked with the value of the underlying collateral and shall operate in the following manner:

                       i.         60% for Clean Lending

                      ii.         40% Value of Collateral up to 100% of loan

                     iii.         20% Value of Collateral Greater than the Loan Amount

In cases, where a loan falls in two categories, higher risk coverage shall prevail.

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Small and Medium Enterprises Development Authority
(SMEDA)
4th Floor, Building no.3, Aiwan-e-Iqbal Complex

Egerton Road, Lahore - Pakistan
Ph: (042) - 111 111 456
Fax: (042) - 36304926 / 7