During the coronavirus outbreak, companies are laying off their employees because they are unable to pay their wages and salaries. The SBP Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of Business Concerns.
It is a temporary refinance scheme gives businesses incentive to not layoff its workers during the COVID19 pandemic. Furthermore, the scheme will be available to all businesses in Pakistan through banks. Also, it cover all types of employees, including permanent, contractual, daily wages and outsourced workers.
“Businesses that keep their employees for 3 months will get mark-up on the loans under this scheme will be up to 5%. However, Borrowers that are on the active taxpayers list will be able to get loans at a further reduced mark-up rate of 4%.”
Furthermore, the statement of the state bank reads that the scheme will give preference to smaller businesses. However, businesses with a 3-month wage and salary expense of up to Rs. 200 million will be able to avail the full amount of their expense in financing. While those with a 3-month wage and salary expense of greater than Rs. 500 million will be able to avail up to 50% of their expense. Businesses in the middle category will be able to avail up to 75% of their 3 months’ salary and wage expense.
The banks will not charge any loan processing fee, credit limit fee or prepayment penalties for loans under this scheme.
A grace period of six months will be allowed to the borrowers. While the repayment of the principal amount will be made in two years. Banks will provide weekly reporting to SBP on the take up of the scheme. And, in particular the reasons for any denials of financing requests under this scheme.
However, it is expected that employers that retain workers on their payroll will be able to restore or increase production quickly once the situation normalizes.
The scheme will ease the liquidity constraints of the businesses and they can use their available financial resources to meet other working capital requirements.
Interested businesses can access details of the scheme at http://www.sbp.org.pk/smefd/circulars/2020/C6.htm and
For further clarification for any information not available at this website, interested businesses can get further information from SBP by writing to email@example.com or calling 021-111727273 during normal business hours.