ISLAMABAD: Pakistan’s Finance Ministry has launched the first special credit guarantee company namely the National Credit Guarantee Company Limited (NCGCL), to provide financial assistance to small and medium-sized enterprises (SMEs) in the country.
The inauguration ceremony was attended by representatives from the British High Commission, State Bank of Pakistan, Association of Chartered Certified Accountants (ACCP), and the Ministry of Finance on Friday.
The NCGCL, the joint venture of Ministry of Finance and Karandaaz, aims to enhance financial accessibility through special credit guarantee facilities, particularly focusing on expanding financial reach for businesses operating at the small and medium scale across the board.
Minister for Finance Dr Shamshad, speaking on the occasion, highlighted the significance of the revolutionary initiative. She said that the private credit for SMEs in the country stands at a mere 5.2 percent, declining from 7.7 percent in the last five years in the country.
Small businesses are the backbone of any thriving economy! The UK's PKR 6 billion support of a new National Credit Guarantee Company with @Financegovpk and @KarandaazPK means Pakistani SMEs can get the funding they need to scale up. pic.twitter.com/9IOWlc1P18
— Jane Marriott (@JaneMarriottUK) January 12, 2024
Dr Shamshad said reality is that SMEs sector accounts 90 percent of formally registered businesses, contributes to around 40 percent of GDP and employees around 80 percent of non-agriculture labour forces, offering an opportunity to low-income segments.
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She said launching of NCGCL was a far-reaching institutional reform that is being launched, adding the purpose of this step was to facilitate smoother capital investment paths for small businesses.
The minister said that the credit guarantee company will create various products tailored for the Pakistani market catering to more than 1.5 million SMEs and a market volume of over PKR 3.7 trillion.
She emphasized that cooperation with financial institutions through NCGCL will ensure guaranteed access to credit in the market and promote economic growth of enterprises.
