Legal cover to venture capital financing urged

KARACHI - The Union of Small and Medium Enterprises (UNISAME) has urged Adviser to Prime Minister on Finance Shaukat Tarin to give legal cover and protection to venture capital financing to strengthen financial support for SMEs in the country.
UNISAME President Zulfikar Thaver said that Shaukat Tarin, the then chairman of access to finance committee of SME Task Force had supported and recommended venture capital for SME promotion and development. He said that the adviser also listed benefits of venture capital and now that he is in a position he should implement the system of venture capital which is a tool for SME promotion.
He also urged various Islamic banks working in Pakistan to examine the aspects of venture capital and if it comes under the concept of Islamic financing to introduce venture capital vigorously in Pakistan.
Irfan Khan, manager wealth Bank Islami said the two salient features of Islamic banking are ownership and risk and are co-related as long as the risk is that of the owner he or she can derive benefit from it by letting or sub letting it to another and on these basis the concept of venture capital can be further developed for SMEs willing to set up industries with capital from investors and the entrepreneurs can share the profits or losses with the owners as agreed under the contract.