Karan­daaz, Orix Leas­ing ink $40 mil­lion ac­cord

The Pak Banker - - COMPANIES/BOSS -

Karan­daaz Pak­istan and ORIX Leas­ing Pak­istan Lim­ited (OLP) signed a $40 mil­lion risk par­tic­i­pa­tion agree­ment through which OLP will pro­vide as­set fi­nance for cap­i­tal in­vest­ment to small busi­nesses op­er­at­ing in or­ga­nized sup­ply chains of the econ­omy.

The pro­gram which has been made pos­si­ble due to the gen­er­ous fi­nan­cial sup­port from the United King­dom Depart­ment for In­ter­na­tional De­vel­op­ment (DFID), has been de­vel­oped in re­sponse to the sharp de­cline in SME fi­nance in Pak­istan, from ~17% of to­tal com­mer­cial bank lend­ing in FY2008-9 to 6% by FY2014-15. Ac­cess to term fund­ing (long term cap-ex fi­nanc­ing) is even more scarce for SMEs in Pak­istan.

ORIX Leas­ing'sMan­ag­ing Di­rec­tor and CEO, Teizoon Kisat said, "The al­liance with Karan­daaz Pak­istan will be ben­e­fi­cial to OLP for grow­ing its core busi­ness of lease fi­nanc­ing for SMEs. Un­der the al­liance, OLP will tar­get ven­dors of large cor­po­ra­tions. Th­ese ven­dors are part of OLP's niche mar­ket of SMEs where credit eval­u­a­tion re­quires spe­cial­ized skills. The in­volve­ment of large cor- po­ra­tions will pro­vide valu­able al­ter­nate ev­i­dence for iden­ti­fy­ing and eval­u­at­ing credit wor­thi­ness of the ven­dor in SME sec­tor who do not have col­lat­eral and are cur­rently de­prived of ac­cess to the for­mal fi­nan­cial sec­tor."

Kisat added that OLP has ac­cess to more than 100 cities and towns across the Coun­try and its well trained and ex­pe­ri­enced team spe­cial­izes in cater­ing to the needs of SMEs. Over the past few years, OLP has recorded com­mend­able growth in its SME port­fo­lio. The Com­pany's strong busi­ness pro­file is sup­ple­mented by a healthy as­set base and sound as­set qual­ity. Present at the oc­ca­sion, Ishrat Hu­sain, Chair­man of the Board of Di­rec­tors at Karan­daaz Pak­istan, said, "The leas­ing in­dus­try has grown rapidly in Pak­istan since the early 1990s and is a well-rec­og­nized SME credit model, con­tribut­ing to cap­i­tal for­ma­tion for in­dus­trial and ser­vice sec­tors. This par­tic­u­lar part­ner­ship tar­gets even smaller en­ter­prises that were pre­vi­ously ex­cluded. I would like to take this op­por­tu­nity to ac­knowl­edge the vi­sion­ary lead­er­ship of TeizoonKisat who has played a vi­tal role in for­mal­iz­ing this joint ven­ture with Karan­daaz Pak­istan.

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