KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president Mian Nasser Hyatt Maggo expressed his dissatisfaction over the exorbitant interest rate of up to 9% allowed to commercial banks under SBP’s SME Asaan Finance Scheme (SAAF). He added that SBP will provide refinancing to the commercial banks at 1% and they will be allowed to charge up to 8% on top of that, i.e. up to 9% in total. FPCCI chief demanded that SAAF scheme should not have a total interest rate over 3% to make it at par with TERF and making it affordable for SMEs. Mian Nasser Hyatt Maggo added that SBP’s total refinances limit for the program appears to be a small and insignificant amount of Rs. 1.19bn as per budget documents for the year 2021-22; under the head of Refinance and Credit Guarantee Scheme for Collateral Free Lending to SMEs. He termed the minuscule amount for the SAAF scheme for the year 2021-22 a joke with SMEs. FPCCI chief expressed his shock over the fact that the TERF scheme has a total overlay of Rs. 560bn and has mainly gone to large and established businesses and, on the other hand, SMEs continue to be neglected by SBP. Maggo demanded that Pakistan needs an effective, inclusive, wide-ranging, and collateral-free SMEs Finance Scheme backed by the State Bank of Pakistan and, in principle, it should be as big as TERF and should run into billions of rupees. Mian Nasser Hyatt Maggo said another glaring flaw in the scheme is that commercial banks will have total discretion in approval of the financing under SAAF; which, in turn, will cause delays and disapprovals. He demanded that SBP should devise a transparent and definitive mechanism for the effective implementation and enforcement of the SAAF scheme. FPCCI is eagerly looking forward to having a detailed and tangible consultative process with SBP officials to work out a progressive and growth-oriented finance package for SMEs of Pakistan – the real engine of economic growth & employment generation in Pakistan.