State Bank of Pakistan (SBP) has drafted a Secure Transaction Law in consultation with international financial agencies to resolve SMEs collateral related issues and the draft will be sent to Finance Ministry that will put it before the National Assembly for approval. And commercial banks are required to make out of the box lending to SMEs as conventional methods of financing SMEs have not showed encouraging results.
This was stated by State Bank of Pakistan SMEs Executive Director Syed Sumar Hasnain while exclusively talking to Daily The Pak Banker on the sideline of a Pakistan SME Forum 2015 here on Tuesday. He said that the commercial bank will be able to confidently lend to the SMEs once the Secure Transaction law approved. "The Banks will register moveable assets of the SMEs assets collateral which will be check on the double use of an asset as collateral. The draft has been sent to the Finance ministry which has raised a few quires. After the process is completed the law will be presented in Parliament for its approval," he added.
"SME lending is a different model and it cannot be successful with the use of conventional methods. We need SME bankers for SME lending as SME lending is not corporate lending model," he said. Currently the SMEs that have a good