“Microfinance is an idea whose time has come.”: Kofi Annan, Former UN Secretary-General

MICROFINANCE FORUM IN ISLAMABAD

The Union of Small and Medium Enterprises (UNISAME) urged Shamrock Conferences chairman Menin Rodrigues to advocate the cause of the majority micro enterprises sector at the 9th assembly of the stakeholders vigorously on 26th November 2015 at a local hotel in Islamabad and impress upon the policy makers the urgent need for the uplift of the micro and small enterprises at the Micro Finance Forum 2015 organized by Shamrock Conferences.

President UNISAME Zulfikar Thaver said since the commercial banks are not comfortable in financing the small enterprises it is necessary that the microfinance banks (MF) accommodate the small enterprises also along with the micro enterprises.

To enable the MF banks to finance the small entrepreneurs it is important that their financing limit is enhanced from half million to one million and accordingly all caps and restrictions are removed he pleaded.

Secondly he advised the concept of MSME banks instead of SME banks to include the micro, small and medium sectors in the MSME banks portfolio. He welcomed the decision of the State Bank of Pakistan (SBP) to privatize the SME Bank with the agenda of 80% of financing specifically for the SMEs. He requested the SBP to make the SME Bank an MSME Bank to cater to the micro enterprises also.

Thirdly he emphasized the need for products for the sector and recommended the Hire Purchase and “Pay as you earn schemes “. Many home based and cottage industries are resorting to collective monthly contributions to committees which are very risky as amount is in the management of one group leader who provides loans by turns to the committee members.
This system of committee finance could be managed by the MF banks and they can make a product. The local name of the committee system is called VISI and is very popular but risky.

Fourthly many women are in dire need of funds to start home business of catering and making food preparations and also stitching units and also beauty parlours and need finance to buy equipments. The MF banks need to come up with products to finance them at affordable mark up.

He appreciated the role of the MF banks and their contribution to the economy as they are providing much needed support to the huge sector.

Thaver urged the MF banks to reduce their mark up to make it affordable and also urged the goverenment to enhance the scope of the Microfinance Fund to enable the MF banks avail the fund and serve the majority sector

He also suggested the MF banks to open more branches in both urban and rural areas for broader reach and reduction in cost due to productivity.

Posted in: Press Releases