USAID launches access of $60m credit for small, medium businesses in Pakistan

KARACHI: US Agency for International Development (USAID) will provide around $60 million in loan capital to micro, small and medium businesses under the U.S.-Pakistan Partnership for Access to Credit program, a statement said on Wednesday.
The program partners USAID with four Pakistani banks, including Bank Alfalah Limited, JS Bank Limited, Khushhali Bank Limited and First Micro Finance Bank Limited to provide loan capital to underserved businesses and to help them expand, create jobs and increase revenues. The program is a part of the third U.S.-Pakistan Business Opportunities Conference.
Donald Larry Sampler, Assistant to the Administrator in the Office of Afghanistan and Pakistan Affairs (OAPA), while inaugurating the program, said small businesses face challenges to growth, not just here in Pakistan, but in the United States as well and one of the key challenges to small businesses is access to credit.
“Businesses require capital to grow and expand, but far too often, loans are difficult to come by, particularly for smaller businesses,” he added.
He also said that the bank partnership is part of a larger umbrella of U.S. support to provide direct assistance to small and medium businesses to help them grow and expand into new markets.
Of the approximately 3.2 million businesses in Pakistan, nearly 3.0 million are small and medium sized. These small and medium size businesses produce more than 30 percent of Pakistan’s GDP and 25 percent of the nation’s total export earnings.
The sector could contribute even more growth, but is constrained principally by a lack of access to credit. Pakistani banks perceiving the sector as too risky are reluctant to lend to small and medium size businesses.
In the last three years, USAID programs have helped create 23,000 jobs and provided business development service to around 85,000 micro, small and medium enterprises in Pakistan.