In line with the Government of Pakistan’s commitment to improving the socio-economic conditions of special persons and the State Bank of Pakistan’s (SBP) initiatives to enhance financial inclusion, the ‘Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons’ has been launched nationwide. This scheme aims to empower individuals with disabilities by facilitating their access to financial resources necessary for starting new businesses or expanding existing ones.
Overview of the Scheme for Special Persons
The scheme operates under a dual mechanism of refinance and credit guarantee, wherein SBP provides refinance at 0% to Participating Financial Institutions (PFIs), who in turn extend loans to special persons at an affordable markup rate of up to 5% per annum. This setup ensures that special persons receive financial assistance on concessional terms, thereby promoting entrepreneurship and economic independence within this vulnerable segment of society.
Eligibility Criteria
To qualify for financing under this scheme, applicants must hold a CNIC with a disability logo/symbol. The scheme supports both the establishment of new enterprises and the expansion of existing ones, with a maximum financing limit of Rs. 1.5 million. This inclusive approach aims to cater to a wide range of entrepreneurial aspirations among special persons.
Key Features and Benefits
- Financing Scope: Special persons can utilize the loans for various business needs, including capital expenses, equipment procurement, working capital, and other operational requirements essential for business growth.
- Tenor: The scheme offers a flexible repayment period of up to 5 years, including a grace period of up to 6 months, easing the financial burden during the initial stages of business operations.
- Participating Financial Institutions (PFIs): All commercial banks and Development Finance Institutions (DFIs) are eligible to participate in the scheme, thereby expanding the outreach and accessibility of financial services to special persons across Pakistan.
- Rate of Mark-up: Special persons benefit from a competitive markup rate of up to 5% per annum, significantly lower than prevailing market rates, making the scheme financially viable and attractive for prospective entrepreneurs.
- Guarantee/Risk Coverage: PFIs enjoy a 60% risk coverage against the outstanding principal under SBP’s Credit Guarantee Scheme for Small and Rural Enterprises, minimizing their exposure and encouraging them to extend loans to a broader base of special persons.
Application Process: Scheme for Special Persons
Interested applicants can apply for financing under the scheme through their preferred Participating Financial Institution (PFI). The application process typically involves the following steps:
- Preparation of Documents: Gather necessary documents including CNIC with disability logo/symbol, business proposal, financial projections, and personal guarantee where applicable.
- Submission to PFIs: Submit the completed application along with required documents to the selected PFI. PFIs are mandated to process applications within a reasonable timeframe and communicate decisions promptly to applicants.
- Approval and Disbursement: Upon approval, PFIs disburse funds to successful applicants, who can then commence their business activities as per the proposed plan.
Reporting and Compliance
PFIs are required to adhere to reporting guidelines stipulated by SBP, submitting quarterly reports on loan disbursements, repayments, and other relevant metrics. This ensures transparency and accountability in the implementation of the scheme, enabling continuous monitoring and evaluation of its impact.
Support and Resources
For detailed guidelines, circulars, and updates related to the ‘Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons’, applicants and PFIs are encouraged to refer to the official SBP website and circulars:
Frequently Asked Questions (FAQs): Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons
1. What is the Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons?
The Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons is an initiative by the State Bank of Pakistan (SBP) aimed at facilitating access to finance for individuals with disabilities. It operates through a mechanism of refinance and credit guarantee, enabling Participating Financial Institutions (PFIs) to provide loans to special persons at subsidized markup rates.
2. What are the key features of the scheme?
Financing Scope: Special persons can use the loans for various business needs including capital expenses, equipment procurement, working capital, and operational requirements essential for business growth.
Tenor: The scheme offers a flexible repayment period of up to 5 years, including a grace period of up to 6 months, easing financial obligations during the initial stages of business operations.
Participating Financial Institutions (PFIs): All commercial banks and Development Finance Institutions (DFIs) are eligible to participate, ensuring widespread accessibility of financial services to special persons across Pakistan.
Rate of Mark-up: Special persons benefit from a competitive markup rate of up to 5% per annum, significantly lower than prevailing market rates, making the scheme financially viable and attractive for prospective entrepreneurs.
Guarantee/Risk Coverage: PFIs enjoy a 60% risk coverage against the outstanding principal under SBP’s Credit Guarantee Scheme for Small and Rural Enterprises, reducing their exposure and encouraging them to extend loans to a broader base of special persons.
3. Who is eligible to apply for financing under this scheme?
To qualify for financing, applicants must possess a CNIC with a disability logo/symbol. The scheme supports both the establishment of new enterprises and the expansion of existing ones, with a maximum financing limit of Rs. 1.5 million.
4. How can special persons apply for financing under this scheme?
Interested applicants can apply through any Participating Financial Institution (PFI). They should prepare necessary documents including CNIC with disability logo/symbol, a business proposal, financial projections, and personal guarantee where applicable. The completed application should be submitted to the selected PFI, which processes applications promptly and communicates decisions to applicants.
5. What is the role of Participating Financial Institutions (PFIs) in the scheme?
PFIs are responsible for evaluating loan applications, disbursing funds to successful applicants, and ensuring compliance with SBP guidelines. They also submit quarterly reports on loan disbursements, repayments, and other relevant metrics to SBP’s Development Finance Support Department, ensuring transparency and accountability.
6. Where can I find more information about the scheme?
For detailed guidelines, circulars, and updates related to the Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons, applicants and PFIs are encouraged to refer to the official SBP website and circulars. These resources provide comprehensive information on eligibility criteria, application procedures, and operational guidelines.
7. What are the long-term benefits of this scheme for special persons?
The scheme empowers special persons by providing them with financial resources and support necessary for entrepreneurship. It fosters economic independence, enhances employment opportunities, and contributes to the overall socio-economic development of Pakistan.
8. How does the scheme contribute to inclusive economic development in Pakistan?
By catering specifically to the financial needs of special persons, the scheme promotes inclusivity in economic participation. It enables special persons to actively contribute to the national economy, fostering a more equitable society where all individuals, regardless of disability, have equal opportunities to thrive and succeed in their entrepreneurial endeavors.
Conclusion
The ‘Small Enterprise (SE) Financing and Credit Guarantee Scheme for Special Persons’ represents a significant step towards inclusive economic development in Pakistan. By providing tailored financial solutions and support mechanisms, the scheme empowers special persons to realize their entrepreneurial aspirations and contribute actively to the national economy. For more information and to begin the application process, visit the SBP website or contact your nearest Participating Financial Institution today.
Additional Resources
This initiative reaffirms SBP’s commitment to fostering an inclusive and equitable society where all individuals, regardless of disability, have equal opportunities to thrive and succeed in their entrepreneurial endeavors.