UK-funded Karandaaz, JS Bank to finance SMEs

UK-funded company Karandaaz has signed an agreement with JS Bank to jointly make Rs 1 billion available for Small and Medium Enterprise financing.
Increased access to SME financing will create jobs, improve household incomes and boost economic growth at a macro-economic level in Pakistan, the British High Commission said in a statement.
Karandaaz Pakistan, a company funded by the UK’s Department for International Development, and JS Bank, one of Pakistan’s fastest growing banking institutions, signed the risk participation agreement to jointly facilitate SME financing.
The facility has been designed on a 50-50 risk participation basis between the two organisations to improve overall commercial lending for the SME sector in Pakistan.
Joanna Reid, Head of DFID Pakistan, while speaking about the partnership between Karandaaz and JS Bank said: “This is an exciting new step in the UK’s support to Pakistan’s economic growth and improved business investment climate. I’m proud of the agreement signed today as SME financing means more jobs for younger people, a skilled workforce and innovation I businesses. The UK is committed to support Pakistan to reduce poverty and achieve prosperity for all.”
Speaking on the occasion Ali Sarfraz, Chief Executive Karandaaz Pakistan said: “It is critical for broad-based economic and employment growth in Pakistan that the existing credit contraction is reversed and brought in line with comparable international benchmarks of at least 20-30 percent of banking assets directed towards SME financing. It is also crucial for commercial banks to develop viable credit models to lend to this vital agent of the economy. Karandaaz is glad to be partnering with JS Bank, one of Pakistan’s most forward-looking banks, to introduce this financing for SMEs.” n