During a session of the Senate Standing Committee on Finance
held on Wednesday, it was disclosed that the Small and Medium Enterprises (SME)
Bank is on the verge of complete closure within the next few days.
Tahir Qureshi, the President of SME Bank, provided an
extensive briefing to the committee regarding the impending closure of the
bank. He conveyed that 18 branches have already been shuttered, while the
closure process for 5 more branches is currently underway. Mr. Qureshi further
explained that the full closure of SME Bank is anticipated to take place in the
imminent future.
The announcement of the bank's closure prompted strong
reactions from committee members, with some expressing concerns that this move
could have detrimental effects on SMEs (Small and Medium Enterprises) in
Pakistan.
Number of active SMEs
in Pakistan reaches 5.2 million
Senator Mohsin Aziz expressed alarm about the possibility of
significantly higher interest rates that small entrepreneurs might encounter
from other financial institutions, stating, "Banks may now offer loans to
small entrepreneurs at interest rates as high as 40 percent." The senator
suggested that parliamentary intervention should take place before the complete
closure of SME Bank. Additionally, he briefly highlighted issues within the
National Bank, where default rates are notably elevated.
Chairman of the Committee, Senator Saleem Mandviwalla,
inquired about the government's alternative plans for supporting the SME sector
and sought potential solutions to avert the impending crisis. The Finance
Secretary proposed the encouragement of private commercial banks to step in and
extend support to the SME sector. He mentioned the potential implementation of
the State Bank Consulting Incentive Scheme for this purpose, although specific
details were not provided during the briefing.
Source: Pro Pakistani