Karandaaz committed to double SME’s financing share

ISLAMABAD: Not-for-profit financial institution Karandaaz Pakistan geared up efforts to double share of small and medium and enterprise (SME) sector’s financing in the total private lending to 15 percent by 2020, its executive said on Tuesday.

Chief Executive Officer Karandaaz Pakistan Ali Sarfraz Hussain told reporters that Karandaaz Pakistan, financially backed by 187 million pounds from UK’s Department for International Development (DFID) and $32 million from US-based private foundation Bill and Melinda Gates Foundation, is implementing national financial inclusion program under which the credit to SMEs would be doubled from 7 percent to 15 percent by 2020.

“UK’s DFID has committed 187 million pounds up to 2024 out of which they so far provided us 40 million pounds,” Hussain said. “We are implementing national financial inclusion program in order to ensure access to un-banked populations.”

Karandaaz has so far invested Rs5.1 billion till June 2017 to promote financial inclusion and provide support to 300 SMEs.

Karandaaz’s CEO said Pakistan has one of the lowest financial inclusion ratios, as only 23 percent of adults have bank accounts as against 83 percent in Sri Lanka and 53 percent in India.

Hussain said the company launched financial and digital inclusion program for 500,000 small famers possessing landholdings of up to 12 acres.

The banks provide loans and its interest cost is borne by government of Punjab, while Karandaaz provides technical assistance, he added. “So far 93,000 farmers have availed this facility and our target is to reach out 500,000 farmers,” he added.

The expected investment would touch 164 million pounds for 1,200 plus SMEs and it would generate 100,000 jobs and SMEs sector would generate Rs50 billion in revenues. Karandaaz also aims to enhance digital transaction up to 50 percent among youth and 20 percent among rural women by 2020.

“We are building low cost payment infrastructure with an aim to serve unbanked population and digitisation of government payments,” Hussain said.

Karandaaz also assists Central Directorate of National Savings to promote digital financial transactions among 7.7 million small savers with an estimated flow of Rs2 trillion.

Karandaaz innovation challenge fund selected more than 40 women to support them. “We will invest in their businesses to promote enterprising trends among women,” Hussain added.