Karachi, April 16, 2020: President Federal B Area Association of Trade & Industry, Karachi Abdullah Abid have appreciated the steps taken by State Bank of Pakistan in providing relief to industries for payment of salaries & wages to their workers and employees.
He said that on behalf of our association would like to thank you for the steps taken by State Bank of Pakistan (SBP) in providing relief to the industries. It is pertinent to mention that recent refinance scheme for payment of wages & salaries to the workers & an employee of business concern was once again a great initiative by SBP.
We would like to inform you that many businessmen have approached our association who are only availing Islamic finance facilities, they belong to SE/ME sector. You are well aware that SMEs account for more than 90 % of the total business establishments in Pakistan, they create new jobs and facilitate wealth creation, provide essential business infrastructure for large enterprises, and are the basic source of innovation & entrepreneurial activity.
Many businessmen from SE/MEs sector especially those are categorized as “indirect exporters” have approached our association and requested us to raise our voice on the following:
Exporters have a facility of subsidized credit schemes such as ERF, and SBP have further supported them by providing relaxation in matching amount and reducing the export performance, whereas indirect exporters (SME/MEs) have no subsidized credit schemes.
EFS & LTFF are also available for exporters but no such product of working capital is available for Islamic bank at a subsidized rate of 4-5 percent.
Islamic banking is offering products, but all are at KIBOR + spread from 2-3.5%. Due to the COVID-19 pandemic Pakistan’s exporters & indirect exporters are facing difficulties. Instead of providing same growth to economy by facilitating exporters but are ignored.
In current situation imported consignments of SMEs are in transit for which they need relives through additional banking credit facilities as payment circulation is totally freezed and receivables are mostly delayed they are failed to even pay duties and taxes on imported goods in this situation enhancement of limits to be allowed for retirement of transit consignments.
Therefore, we on behalf of our association “FBATI” will request SBP to develop some policy/procedures for Islamic banking at subsidized rates of 4-5 percent.
It is also relevant to mention that, many factories in Karachi Export Processing Zone (KEPZ) wish to avail products from Islamic bank, but unfortunately there is no window for Islamic banks in KEPZ.