Industry seeks long-term SME loans at 2%

The Federal B Area Association of Trade and Industry, known as FBATI, has asked the State Bank of Pakistan to bring long-term lending costs for small and medium enterprises down to 2 per cent a year, according to Express Tribune. Its president, Raza Hussain, wrote to the SBP governor seeking a fixed-rate financing plan to help revive small industrial units.

The letter says SMEs face sustained strain from high borrowing costs, energy tariffs and rising taxes, and it calls for a lasting financing framework tailored to small and medium industries. Hussain noted that current business loans are priced at 2 per cent above the Karachi Inter-bank Offered Rate (Kibor), which makes credit extremely expensive for small firms. According to the association, costly bank loans have made it hard for industrialists to buy machinery and raise output.

The FBATI also wants the SBP to extend financing to small industries at rates comparable to those available to exporters. The association added that a rising count of small unit closures is pushing up joblessness.