LAHOER (Staff Report) – US Consul General in Lahore Zachary Harkenrider highlighted US support for small and medium enterprises at an event marking the Punjab launch of the US – Pakistan Partnership for Access to Credit Program.
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Supported by the United States Agency for International Development (USAID), the program will provide credit to qualified micro, small and medium-sized Pakistani businesses through a partnership with four Pakistani banks.
“One of our top assistance priorities is helping Pakistan achieve sustained economic growth and development. Today we come together to celebrate the Punjab launch of an important program designed to do just that,” stated Consul General Harkenrider.
He added that this partnership with Pakistani banks is part of a larger program of support that will provide direct assistance to SMEs to help them grow, expand, and find new markets for their products and services.
The US – Pakistan Partnership for Access to Credit is a partnership of USAID with the following four banks: Bank Alfalah Limited, JS Bank Limited, Khushhali Bank Limited, and First Micro Finance Bank Limited. The program was launched at the national level earlier this year.
Of the approximately 3.2 million businesses in Pakistan, nearly 3 million are small and medium sized. These small and medium sized businesses produce more than 30 percent of Pakistan’s GDP and 25 percent of the nation’s total export earnings.
The sector could contribute even more growth, but is constrained principally by a lack of access to credit.
Pakistani banks often perceive the sector as high-risk and are reluctant to make loans to small and medium sized businesses.
To change this perception and demonstrate the financial viability of lending to this sector, USAID through the US-Pakistan Partnership for Access to Credit program has partnered with local banks to provide up to $60 million in loan capital to micro, small and medium businesses.
Of this amount, $12.1 million has been set aside for educational institutions.
The United States has a long track record of support to small and medium enterprises in Pakistan. In the last three years, USAID has supported job creation for 23,000 Pakistanis through cooperative projects and more than 85,000 micro, small and medium sized enterprises have received business development services from various US initiatives in Pakistan.