SME Division

SME DEFINITION

PKR PKR

NUMBER OF ANNUAL SALES LIMIT /

CLASSIFICATION SEGMENT
EMPLOYEES TURNOVER EXPOSURE

SE UP TO 50 150 MIO 25 MIO

ME TRADING 51 - 100 800 MIO 200 MIO

ME MANUFACTURING 51 - 250 800 MIO 200 MIO

ME SERVICES 51 - 250 800 MIO 200 MIO

SME FUNDED & NON FUNDED FACILITIES / PRODUCTS

Long Term Finance Facility

Short Term Finance Facility
Running Finance Facility
Cash Finance / FIM Facility
FATR
Commercial Vehicle Leasing
Auto Leasing
Supply Chain Financing (assignment of
receivables)
SBP Refinance & Subsidized Schemes for
SMEs
Guarantees
L/C
 SBP SCHEMES FOR SMEs

SBP has introduced various SME-related refinance facilities, given the importance of SMEs in economic development

 Refinance Facility for Modernization of SMEs

 Working Capital Financing of Small Enterprise and Low-End Medium
Enterprise
 SBP Financing Scheme for Renewable Energy Category II
 Refinance & Credit Guarantee Scheme for Women Entrepreneur
 Long Term Financing Facility (LTFF) for Plant & Machinery
 EFS – Export Finance Scheme
 Prime Minister Kamyab Jawan Youth Entrepreneur Scheme
 TERF
 REFINANCE FACILITY FOR MODERNIZATION OF SMEs

Purpose: Financing Brand New Plant, Machinery, Equipment, Generator(up to

500KVA) & Imported up to (C&F) value and Locally manufactured / Imported up to
(Showroom / ex-factory price)

Segments: Manufacturer, Services

Tenure: 10 years max

Rate: Flat 6.0% p.a.

Financing Limit: Small Enterprise Up to 25 Million

Medium Enterprise Up to 200 Million
 MODERNIZATION OF SME (Contd.)

 Borrower must be SME

 Services/ Manufacturing
 Financial Statements & Projections
 Payment to be made Directly to the Supplier
 Brand New (No Second Hand / Used)
 Purchase of new imported/local plant & machinery
 Financing new Generator up to 500 KVA (Proper justification for requirement
of Generator)
 Advance payment 20% of the C&F value/ ex-factory/ showroom price
 Grace period, if allowed should not be more than 6 months
 Trader not qualify for the said Scheme
 SBP FINANCING SCHEME FOR RENEWABLE ENERGY CATEGORY II

Financing shall be available to domestic, agricultural, commercial and industrial

borrowers who are desirous of installing renewable energy based projects/ solutions of
up-to 1 MW for generation of electricity.

Advance payment to the extent of 20% of invoice value

Tenure: Max up to 10 year including maximum grace period of 3 months

Markup Rate: Flat 6.0% p.a.

Financing Limit: Consolidated borrowing of a single borrower under this category

shall not exceed Rs. 400 Million
 RENEWABLE ENERGY (Contd.)

 Purpose of Finance (Installation of Solar / Renewable Energy Plant /

Equipment for Own Use or For Supply to the Distribution Company)
 Commercial proposal from the vendor (feasibility study of the solar energy
system, details of solar panels and invertor, Cost Break up, Vendor Profile,
Manufacturer Profile)
 Commercial invoice
 Applicable AEDB/ PEC registration if customer going for net-metering
 Advance payment to the extent of 20%
 Installed equipment must be brand new
 Payment to be made Directly to the Supplier / Vendor
 REFINANCE & CREDIT GUARANTEE SCHEME FOR WOMEN ENTREPRENEUR

Financing shall be available to women entrepreneur to meet credit needs of their

business

Tenure: Max up to 5 year including maximum grace period of 6 months

Markup Rate: Flat 5.0% p.a.

Financing Limit: PKR 5 Million

 WOMEN ENTREPRENEUR (Contd.)

 Borrower must be Women

 Sector: Services/ Manufacturing
 Purpose of Financing along with Justification
 Verification of Business Place
 WORKING CAPITAL FINANCING OF SE & LOW END ME

Purpose: Financing available to meet working capital requirement for below sectors

Information Technology (IT) Gems and jewerly

Furniture Leather industry
Surgical goods Fruits, vegetables and food processing & packaging
Dates processing Printing & packaging

All SE’s as per SBP Prudential Regulation are eligible (Maximum Limit Rs. 25
Million)

Low End Medium Enterprises with annual sales of Rs. Up to Rs. 300 million is eligible
under the scheme (Maximum Limit Rs. 50 Million)

Tenure: Max up to 1 year (no grace period allowed)

Rate: Flat 6.0%

 WORKING CAPITAL FINANCING (Contd.)

 Borrower is SE or Low end ME (Max Sales 300 Million)

 Latest Audited Accounts
 Type and tenure of facility (RF not allowed)
 Eligible sectors only
 Borrower Amount of Financing: SE Rs 25 Mn, ME Rs 50 Mn
 LONG TERM FINANCING FACILITY (LTFF) FOR PLANT & MACHINERY

Introduction
Exporters (including SMEs) can avail financing under the facility through Participating Financial
Institutions (PFIs) for new imported and locally manufactured plant and machinery.
The facility is available to the export oriented projects with at least 50% of their sales constituting
exports if their annual exports are equivalent to US$ 5 million, which ever is lower.

Salient Features
The loans availed under the Facility shall be repayable within a maximum period of 10 years
including a grace period of 2 years from availment date. However, where financing facilities have
been provided for a period of up to five years maximum grace period shall not exceed one year.

Period of Financing End User's rate( Textile Sector)

Up to 10 years 5.00%
Disclaimer
Lending under the facility shall also be subject to compliance with the Prudential Regulations as
prescribed by the State Bank from time to time for different categories of borrowers.
 EFS – EXPORT FINANCE SCHEME

Introduction
Export Finance Scheme (EFS) is a concessional short term financing facility provided
to exporters through banks for exports of manufacturing goods and services especially
value added products.

Salient Features
Financing under EFS is available to exporters including manufacturers, trading
companies and new exporters.
Financing is available to indirect exporters

Mark up Rate
3.0% p.a.
 PRIME MINISTER KAMYAB JAWAN YOUTH ENTREPRENEUR SCHEME

Eligibility Criteria:
• Age between 21 and 45 years with entrepreneurial potential are eligible.
• For IT/ E-Commerce related businesses, the lower age limit will be 18 years.
• SME (startups and existing businesses) as per definition of SBP and owned by youth as per
above mentioned age brackets are also eligible.
• For IT/E-Commerce related businesses, at least matriculation or equivalent education will be
required.
• In case of partnership and companies only one of the owner, partner or director must be in the
age bracket prescribed above

Loan Amount:
• Tier 1 (T1) loans- Rs 100,000 to Rs. 1 million
• Tier 2 (T2) loans- Above Rs 1 million and up to Rs 10 million
• Tier 3 (T3) loans- Above Rs 10 million and up to Rs 25 million

Tenure: Max up to 8 year (maximum grace period of upto one year)

Loan Repayment/Installment: Equal Monthly Installments

 PMKJ-YES(Contd.)

Pricing: Working Capital & Term Loans

Product Customer Pricing Bank Pricing
Tier 1 3% KIBOR(one year offer)+400 BPS
Tier 2 4% KIBOR(one year offer)+400 BPS
Tier 3 5% KIBOR(one year offer)+400 BPS

Risk Mitigation:
GoP will bear credit losses (principal portion only) on the disbursed portfolio of the banks:
• T1 loans: Up to 50%
• T2 loans: Up to 20%
• T3 Loans: Up to 10%

Debt/Equity:
The Borrower’s contribution of equity would be in the form of Cash or Immovable Property
and will be required after approval of loan.
For New Businesses
• Tier 1 (90:10) Tier 2&3 (80: 20)
 For Existing Businesses: Nil for all tiers
 TEMPORARY ECONOMIC REFINANCE FACILITY - TERF

Scope & Eligibility Criteria:

• In addition to the new projects, existing projects/ businesses are being allowed to avail
financing under these Facilities for undertaking Balancing, Modernization and Replacement
(BMR) and/or expansion of their projects/ businesses
• The Facility will expire on March 31, 2021.
• Disbursements by bank should not be made to the borrower directly; instead, payments shall
be made to the manufacturers / suppliers of the plant & machinery.

Non Eligibility Criteria:

• Second-hand machinery shall not be eligible under the facility.
• Financing shall not be available for the purpose of acquisition of land, construction of
building etc.
• The cost of insurance, transit insurance, erection and commissioning charges and other
incidentals (including transportation charges, in case of locally manufactured machinery)
etc.; shall not be financed under the facility.
 TEMPORARY ECONOMIC REFINANCE FACILITY - TERF

Loan Amount: Maximum borrowing limit for a single project/production unit will be Rs 5
billion

Tenure: Financing shall be available for a maximum period of 10 years including a maximum
grace period of 2 years.

End User Rate: 5% (SBP Rate 1% Bank Spread 4%)

Loan Repayment/Installment: Quarterly/Half Yearly Installment after prescribed grace period.

Markup shall be paid on quarterly basis