In a letter written to SBP Governor Reza Baqir, Pakistan Poultry Association former chairman Abdul Basit pointed out that in the midst of Covid-19, the SBP Refinance Scheme had failed to deliver despite an allocation of around Rs30 billion by the federal government.
{Banks should provide loans according to the SBP directives and without the condition of showing past records, so the industry can give wages of workers, meet expenses of running operations, pay utility bills and rents} he said;
The SBP introduced the scheme at 5% interest for any company that committed not to lay off workers from April to June 2020 but he said; loan applications were being rejected on grounds of weak audited accounts despite the arrangement of collateral.
He pointed out that in another scheme-the SBP announced the rescheduling of loans and fixed December 30, 2019 as the default date, which provided a narrow window and a large number of businesses could not avail it, especially the poultry sector.
He said the poultry sector had been facing losses for the past two years due to a high cost of production coupled with falling purchasing power of consumers.
The central bank should restructure industrial loans for at least the past two years, so that the entire poultry sector could benefit from the scheme and sustain its business in this critical time' he urged.
Basit asked the SBP governor to review policies and cut interest rate to zero with a view to providing the private sector with full access to very low-cost borrowing in it.
He stressed that the cost of production had increased manifold as the borrowing cost soared and capital financing became more expensive.
Basit suggested that the government should introduce a policy to uplift the businesses hit hard by Covid-19 besides launching financial programmes for the revival of closed industrial units.
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