Union of Small and Medium Enterprises (UNISAME) invited the attention of the Task Force (TF) on Islamic Banking (IB) in its first meeting at State Bank of Pakistan presided by Director IB Division Saleemullah that Musharaka and Mudaraba financing is the first choice of the SMEs and urged the TF to make it compatible for the sector for financing their needs for inland and international trading.
President UNISAME Zulfikar Thaver said the SMEs are disheartened by the conventional banks due to their unwillingness to take risk even in cases where the funds are provided by the SBP. The conventional banks do not have risk management expertise and are not well versed in collateral management and clinging to old methods of financing. They insist on immovable property as collateral and refuse to accept personal guarantees, goodwill of the firm, brand ownership and even goods in transit are declined as col lateral whereas in other countries of the world it is much easier for SMEs to get finance from the banks on the basis of their cash flows and track records.
He said the SMEs need running finance for their imports and exports, for purchase of raw materials and project finance for setting new industries. The SMEs also need finance for balancing, replacement and modernization.
He urged the members of the TF to develope products for SMEs for mutual benefit and said that there is much scope in the sector and especially in Venture Capital (VC) where innovative ideas could be put to use by the Islamic Banks.
Answering a question on lack of accounting systems he asserted that the micro sector lacks accounting system but the SMEs are now maintaining proper accounts and are growing constantly, they have become efficient and the younger generation is well aware of the fact that technology leads to success.
0 Comments:
Post a Comment