Pakistan working to ease small firms' access to finance

The government is working to remove obstacles that keep small and medium enterprises from getting finance, Minister of State for Finance Bilal Azhar Kayani said on Thursday, the state broadcaster Radio Pakistan reported.

Kayani made the remarks while speaking at a conference in Islamabad organized by the Sustainable Development Policy Institute, or SDPI.

He said a financing facility has been designed to support export growth over the long term.

Under the facility, exporters can borrow money to buy machinery and equipment at an interest rate of two percent for the first two years and five percent for the following eight years.

Kayani said an Export Facilitation Scheme is also operating, which lets exporters bring in raw materials and other inputs without paying customs duty.

He stressed that the country needs economic growth that is both sustainable and inclusive, and said that expanding exports is central to reaching that aim.

He warned that growth built on exports is needed to avoid repeated cycles of rapid expansion followed by sharp downturns.

The SDPI is an Islamabad-based research organization that works on sustainable development and public policy issues in Pakistan.

Small and medium enterprises make up a large share of businesses in Pakistan, and many of them have long reported difficulty obtaining bank credit on affordable terms.