State Bank of Pakistan Building

SBP Allows Financing BMR Projects Under Economic Relief Facility

The State Bank of Pakistan (SBP) has opened up its subsidized Temporary Economic Relief Facility (TERF) for Balancing, Modernization and Replacement (BMR), and expansion of existing projects.

This measure has been taken to provide further stimulus to the economy in the context of COVID-19’s impact on the economy, to support investment in the country for modernizing or expanding manufacturing/production units, and in response from feedback from stakeholders.

Since the outbreak of COVID-19, SBP has taken several measures to safeguard economic activity in the country. On March 17, 2020, SBP introduced TERF and its Shariah-compliant version to stimulate new investment in the manufacturing sector.

Under this scheme, SBP provides refinancing to banks for their onward extension of financing at a maximum end-user rate of 7 percent for 10 years. The maximum financing for a single project under the scheme is Rs. 5 billion. The objective of this facility is to boost economic activity through investments in manufacturing units.

While allowing BMR and expansion of existing projects, SBP has allowed financing for the purchase of new imported and locally manufactured plant and machinery against foreign LC and inland LC. The funding under the facility cannot be used for the procurement of second-hand machinery, land, or carrying out civil works.

Further, SBP has also introduced additional internal and external checks and controls to ensure the proper utilization of funds.

With the expansion in the scope of the facility, SBP expects existing businesses will avail subsidized funding to improve the productivity of their business projects leading to higher economic activity and employment generation.

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

ESA wants to make Moon bases out of astronaut pee

Pakistan’s Rice Exports to The Middle East Rise 59% Due to COVID-19