Islamabad:
The Ministry of Finance and Karandaaz on Friday launched Pakistan’s first special credit guarantee company, National Credit Guarantee Company Limited (NCGCL), aimed at providing financial assistance to small and medium enterprises.
The inauguration ceremony was attended by representatives from the British High Commission, the Association of Chartered Certified Accountants (ACCA), the State Bank of Pakistan and the Ministry of Finance. NCGCL will contribute to improving financial accessibility through special credit guarantee facilities with special focus on expanding financial access for small and medium scale enterprises.
Speaking on the occasion, Federal Minister for Finance, Revenue and Economic Affairs Dr. Shamshad Akhtar, while emphasizing the importance of the credit guarantee company, called it a revolutionary initiative.
He pointed out that private sector credit to SMEs in Pakistan was only 5.2%, down from 7.7% in the last five years.
Reading KP youth, SMEs to receive loans on favorable terms
He described the credit level as significantly lower compared to other South Asian countries, which averaged over 17%. “Undoubtedly, they are doing better in exports and competitiveness.”
Akhtar emphasized that the reality was that SMEs accounted for 90% of officially registered businesses, contributed about 40% of GDP and employed 80% of the non-agricultural workforce, offering an opportunity to the low-income strata of society.
The Minister was of the view that insufficient investment in the MSME sector, globally recognized as one that has enhanced the competitiveness of countries and industries, opted for value addition and created jobs, has hindered Pakistan’s sustainable growth and development.
Calling the launch of NCGCL a far-reaching institutional reform, he stressed that the aim was to facilitate smooth investment of capital in small businesses.
Speaking on the occasion, British High Commissioner Jane Marriott said the initial investment of Rs 6 billion had been made in the company under the financial inclusion programme.
Published in The Express Tribune, January 13u2024.
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