ECC approves Rs 50.69 billion package for SMEs
By Staff ReporterTuesday – April 28, 2020
According to an official statement, the ECC chaired by adviser to the prime minister on finance and revenue (A-PM-FR) Abdul Hafeez Shaikh also approved a credit loss subsidy of Rs 30 billion for the risk sharing facility for State Bank of Pakistan’s (SBP) refinance scheme to support employment and prevent lay-off of workers.
Under the Rs 50.69 billion package titled as “chota karobar o sannat imdadi package” and prepared by the ministry of industries and production (MoIP) with active consultation with small and medium enterprises development authority (SMEDA), approximately 95 percent commercial consumers with connected load up to 5 kilowatt (kW) and 72 percent of industrial consumers with connected load of up to 70 kW will be provided financial support.
The base period for estimating electricity consumption will be May-July 2019 and for meters for which electricity consumption data is not available for the full base period, appropriate average will be used.
To avail of the facility under the “chota karobar o sannat imdadi package,” pre-paid electricity bills of three months or total bills during the base period will be required.
The period of consumption of the extended financial support will be 6 months starting from May/June 2020.
The ECC also allowed Rs 2.5 billion block allocation to the Azad Jammu and Kashmir (AJK) and Gilgit Baltistan (GB) for disbursement through special arrangement.
It further instructed the MoIP to bring up similar relief packages for the agriculture sector including the agricultural tube-wells, as well as transporters and the micro-finance sector.
The ECC on a proposal by the finance division also approved a credit loss subsidy of Rs 30 billion for the risk sharing facility for SBP’s refinance scheme to support employment and prevent lay-off of workers.
Under the scheme, financing will be extended to businesses with maximum sales turnover of Rs 2 billion while the government of Pakistan (GoP) will bear 40 percent first loss on distributed portfolio (principal portion only) for eligible borrowers, in case of repayments, after being classified as ‘loss’ as per classification criteria under the respective SBP prudential regulations.
The banks and development finance institutions (DFIs) assigned limits under SBP scheme will be eligible executing agencies.
On a proposal by the ministry of economic affairs (MoEA), the ECC accorded in principle approval to the external debt restructuring of the GoP by availing the G-20 debt relief and engaging with bilateral donors for individual debt suspension with the provision that agreements to that effect could be subsequently brought to the ECC for approval.
On another proposal by the ministry of defence (MoD), the ECC also approved allocation of additional funds in the form of technical supplementary grant to the tune of Rs 3.02 billion for the fencing of Pakistan-Iran border.