ISLAMABAD: A financial agreement between SME Bank (as borrower on behalf of Government of Pakistan) and Artigiancassa Bank (as lender on behalf of Government of Italy) was signed on Monday. The agreement provides for implementation of a credit facility offered by Government of Italy for provision of Soft Loan of Euro 7.75 million for small and medium enterprise (SME) development in Pakistan. The loan carries 0% interest rate, payable in 39 years. SME Bank would lend this loan to SMEs at a maximum markup of 4% on loan in Euro and 8% on loan in Pak Rupee.
The credit facility shall be available only to private enterprises or enterprises with a public participation up to 20%. Research centres and Universities may also have access to the Soft Loan in order to set up pilot projects or demonstration centres in the field of technology innovation and environment protection. Each individual project, even if split into more than one contract, shall not exceed the amount of Euro 550,000 and shall not be lower than Euro 30,000.
The credit line is proposed to be disbursed through a SMEDA-UNIDO IPU (Small and Medium Enterprise Development Authority – United Nations Industrial Development Organization Investment Promotion Unit). This IPU would be set up within SMEDA premises, through an Italian grant of Euro 1,418,200 (already released in favour of UNIDO). Financial and technical feasibility of each project loan is to be undertaken by the IPU and loans shall be managed through the network of SME Bank.
The signing ceremony was witnessed by Syed Naveed Qamar, Pakistan’s Finance Minister, and Italian Minister of State for Economic and Finance, Mr. Giuseppe Vegas. Mr. R. A. Chughtai, Chairman SME Bank signed the agreement on behalf of GoP and Mr. Stefano Gatti, Head of Revolving Fund Management Unit, Artigiancassa Banking Group of Italy signed on behalf of Italian Government.
Earlier Italian Minister of State for Economic and Finance Mr. Giuseppe Vegas called on Finance Minister, Syed Naveed Qamar in Finance Division Islamabad. Both the Ministers discussed general guidelines of the financial agreement between the Governments of Italy and Pakistan that would help promote small and medium enterprises development in Pakistan, besides fostering collaboration in other sectors.
Both the sides exchanged views on establishing a Technical Support Unit in Economic Affairs Division of Ministry of Finance that would underpin all similar Italian-Funded Projects in Pakistan in various development sectors. Subsequent monitoring and evaluation of all such projects would pave the way for maximum benefits to the people of Pakistan, simultaneously enriching Italian entrepreneurs experience in projects handling world over.
In the end, Mr. Giuseppe Vegas, Italian MOS for Economic and Finance invited Pakistan’s Finance Minister to visit Italy at his convenience in times to come. Such visit certainly would strengthen bilateral relations between People and Governments of both the countries, Syed Naveed Qamar concluded.-SANA