KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) urged the government to announce a targeted amnesty scheme for the industry and concessional loans to facilitate the business community.
“Our very survival is at stake and there will be no jobs left in the economy, if the businesses are not protected,” said FPCCI chairman Irfan Iqbal Sheikh.
He demanded that the government must announce an amnesty scheme offer concessional business loans, EFS (export finance scheme), LTFF (long-term financing facility), and TERF scheme to avert losses to the business, industry, and trade community.
Sheikh expressed his profound concerns over a burning issue of the abysmal state of access to capital for businesses from banking channels, saying after a further raise of 100 basis points in the State Bank of Pakistan (SBP) policy rate making it 17 percent commercial banks would not be willing to lend to businesses for anything less than 20 percent.
FPCCI chief explained that capital and liquidity was like blood or lifeline for businesses and it was a responsibility of the government to protect businesses in general and SMEs (small and medium sized enterprises) in particular regarding ease of doing business and cost of doing business times.
Sheikh said that the current tide of inflation in the country was not demand-pull. Raising the interest rate would do no good to curtail the inflation as the phenomenon was cost-push due to the supply-side disruptions, increasing commodity prices in the international markets, progressively weakening rupee, loss of produce due to floods, and lack of planning on the part of the government, he added.
He further said access to capital from commercial banks and formal channels was so low that only 7 percent of businesses actually borrow from the banking system.
“No economy can grow; set up new industry or expand the existing ones; produce jobs; increase exports and achieve import substitution with such a high lending rates,” he stated.
Suleman Chawla, senior vice president of FPCCI, said the government must come forward and made running finance available to the export-oriented industries so that they could fulfill their export orders.
“We do not have adequate raw materials. Electricity is the most expensive as compared to regional and sub-regional competitors. Gas supplies are not sufficient and we cannot borrow from the banking system even for short-term, given the exorbitant, and unaffordable interest rates,” he said.