The Sindh Enterprise Development Fund (SEDF) has managed to mobilise Rs7 billion investments from both the public and private sectors through provision of credit subsidy worth Rs500 million to help promote and develop small and medium enterprises (SMEs) in the province’s agriculture sector. The SEDF was established by the government of Sindh with a vision to encourage investments in SMEs, improve entrepreneurial ability and provide a major push to the wider economy. It aims to promote opportunities in the agricultural value chain as well as mining and mineral processing sectors for multiple economic benefits. It seeks to introduce interventions to improve efficiency and profitability. According to SEDF figures, the economic impact of this investment is at least 10 times the investment mobilised. Key investment sectors include agri-processing, dairy and livestock farming, poultry farming, fisheries, horticulture and floriculture, storage and cold chain. In this respect, SEDF has entered into agreements with various institutions to transform different sectors of the provincial economy.

The SEDF signed an agreement with the National Bank of Pakistan (NBP) for provision of subsidised financing to SMEs in the province’s agriculture sector. The agreement aims at encouraging farmers to adopt modern agricultural practices and foster economic development. NBP is enabling sustainable growth and inclusive development by providing a diverse range of products and services to the SME sector. The bank is taking initiatives to increase market penetration in the priority sectors of the economy by developing and strengthening value chains among producers, processors, exporters and financial institutions. The NBP’s Inclusive Development Group (IDG) is spearheading these initiatives and working to ensure financial inclusion of underserved sectors with significant business potential. Besides, SEDF and Pak Brunei Investment Company Limited (PBICL) have also signed an institutional collaboration agreement to empower SMEs by providing financial support to them in the shape of markup subsidy.

Under the agreement, SEDF will extend markup subsidy up to the extent of Karachi Interbank Offered Rate (KIBOR) against the financing extended by PBICL. The initiative is aimed at reducing the financial burden on SMEs and facilitating their growth and expansion to drive economic development in the province. Also, SEDF and U Microfinance Bank (U Bank) have formed an institutional collaboration to provide subsidised credit for micro, small and medium enterprises (MSMEs) in Sindh. This collaboration is a step towards the financial inclusion of vital segments of the economy that are often overlooked by larger financing institutions. This will lead to the modernisation of rural economy of Sindh and pave the way for overall growth of Pakistan’s economy.

Credit: Independent News Pakistan (INP)