The Sindh government, in collaboration with the State Bank of Pakistan, has offered interest subsidy of 6.25 percent and credit risk sharing facility of up to 30 percent against the long-term loans to be extended to rice husking mills in Sindh by banks under the existing SBP Refinancing Scheme.
These additional incentives are being offered by Sindh Enterprise Development Fund (SEDF) will encourage rice mills of Sindh to carry out BMR of their units so as to reduce their losses and improve the quality of their products. The improved profitability projections with the availability of additional incentives under the scheme will also encourage potential Small and Medium Enterprises (SMEs) to establish new rice husking units in Sindh.
The broad features of the scheme to be managed by State Bank are summarised below:
i) Mark up subsidy: Mark up rate for the facility shall remain the same viz. 9 percent for financing up to 5 years as applicable under SBP’s Refinance Facility; however, the end-user rate will be 2.75 percent p.a only, ie the difference of 6.25 percent (SBP share) will be borne by SEDF.
ii) Guarantee Cover: Banks will be offered credit guarantee cover of 30 percent against their outstanding loans under the Facility. As mentioned, the cover will be provided on the strength of financial support extended by SEDF.
iii) Tenor of loans: Facility shall be available against loans granted up-to the period of five years.
iv) Loan Limit: Maximum loan size for a single borrower shall be Rs 10 million.-PR
