Banks urged to facilitate SMEs

KARACHI: The Union of Small and Medium Enterprises (UNISAME) has underlined the need of financing facility against back-to-back business for small and medium enterprises (SMEs) and urged commercial banks to act as intermediaries in three way merchanting, a statement said on Saturday.

“Commercial banks welcome the big importers and exporters, but do not encourage the SMEs to indulge in back-to-back orders and letter of credit (LC), especially after the 2008 global credit crunch and downslide in commodities,” UNISAME President Zulfikar Thaver lamented.

The SME exporters need to be facilitated to open back-to-back LCs or place orders with the local manufacturers on the same terms and conditions as per the order or parent LC of the foreign buyer in their favour, he added.