SBP to facilitate establishment

KARACHI - Governor State Bank of Pakistan, Syed Salim Raza on Monday said the Central Bank is working on the establishment of Infrastructure Development Bank and Mortgage Refinance Company under Public-Private Partnership for the growth and development of infrastructure and housing sector in the country.
Presiding over a meeting of Private Sector Credit Advisory Council (PSCAC) here at State Bank, SBP Governor said the State Bank has taken several initiatives for enhancing credit disbursement to underserved segments i.e. agriculture, SMEs, microfinance, housing and infrastructure, said SBP statement.
State Bank is playing its due role to stimulate private sector credit off-take and to turnaround economic slowdown, he said. He, however, stressed upon the private sector to come forward with well thought out project plans so that banks are able to finance them.
“I strongly believe that growth stimulus has to come from agriculture and SME sectors,” he added.
Talking about overall scenario of private sector credit disbursement, Raza noted that decelerating trend of credit disbursement has been arrested and lately disbursement has picked up.
He pointed out that overall decline in credit disbursement was limited to Rs 28b as of July-November 7, 2009 compared with a decline of Rs 81b till July-September 2009.
He said the share of private sector credit in total credit has declined from 61 per cent as at end Dec 2008 to 53.3 per cent by 7th November 2009 due to continuous contraction in PSC and enhanced flow of credit to government sector & PSEs during the last three quarters.
Referring to reasons behind low credit off-take, Raza said that prolonged power shortages and poor security situation had an adverse impact on industrial production which grew by a mere 0.2pc in July-August 2009.
Similarly, decline in exports exhibited some impact of global recession particularly in major export destination like the USA and the European Union which have witnessed one of their worst economic slowdown during last two quarters of 2008 and in the first three quarters of 2009. Textile sector exports earnings have declined by dollars 0.3b during July-Sept. FY10.