CHI - The Union of Small and Medium Enterprises has recommended the Islamic mode of financing as the best option for the SMEs during the present period of reduced financing by commercial banks.
Hub Operations Manager Bank Islami Pakistan Ltd (BIPL) Kazi Shafiquddin explained the benefits of Islamic mode of financing to the members of Unisame and emphasised the fact that in the present scenario Islamic mode of financing is the most suitable where the financing is based on partnerships under Mushariqa and Mudaraba and the burden is not felt by the borrowing partner as it is based on the profitability of the venture.
He also suggested other means of financing such as Ijara where the subject moveable property is given on lease to the borrower and the borrower repays in easy instalments which are treated as rent and on completion of instalments the moveable property is transferred to the borrower.
He also mentioned the Maskan financing for housing and outlined the features for the SMEs who are desirous of buying houses for themselves but are unable to pay in lump-sum due to involvement in business trading or industry and by availing the facilities of Maskan they can own their houses and save the rent amount by paying the loan.
He agreed with President Unisame Zulfikar Thaver that the SMEs should come forward and set up agro-based industries in farm produce items such as tomatoes, garlic, onion, potatoes, spices, vegetables, fruits and promote the industries for making paste and powders. He also suggested the setting up of cold storages and dehydration plants.
Thaver encouraged the SMEs to study precooked food items under halal certification programme of the TDAP and said that feasibilities are available with the SMEDA and also on the website of Union of Small and Medium Enterprises and urged the members to take the initiative and set up industries in the outskirts of cities where land is cheaper and supplies assured from rural base.