ICCI awareness seminar: Govt urged to reduce interest rate for SMEs

WNAM Report:  The Islamabad Chamber of Commerce and Industry (ICCI) in collaboration with Pakistan Stock Exchange organized an awareness seminar on Financial Literacy, Savings & Investment which was attended by a large number of the business community.
Addressing the seminar, Ahsan Zafar Bakhtawari, President, Islamabad Chamber of Commerce and Industry said that the 22% policy interest rate of the SBP is a major hurdle for the development of the SME sector as it has become impossible for SMEs to get loans from banks for business development. He demanded that the government should consider reducing the interest rate for SMEs, which will help promote business activities, increase investment, and improve the economy. He said that everyone including the business community needs to play a role to get the country out of the current economic crisis. He encouraged the business community to invest in the stock market to generate funds for business expansion. He further demanded that the PSX should come up with attractive packages for the SME sector to raise capital from the stock market.
Sarman Hussain, Region Head (Central & North), Pakistan Stock Exchange said that the stock market provides a better option for businesses to raise funds for business development. He said that SMEs can not only raise capital by selling their shares in the stock market, but this will also promote good governance for them. He said that family businesses in Pakistan are declining rather than flourishing as only 12% of family businesses go to the third generation. He said that family businesses should focus on diversification instead of depending on one business line.
Zahid Latif Khan, CEO of Zahid Latif Khan Securities Private Limited, said that investing in the stock market is very profitable. He said that from July to December 2023, there has been a good increase in foreign portfolio investment in the Pakistan stock market, which is a manifestation of the confidence of foreign investors in Pakistan’s economy. He said that Pakistan is a country of about 240 million people, but there are about 75 million bank holders in it, while the number of investors in the stock market is only 310, 000, which is not encouraging. He said that businesses should invest in the stock market, which will improve their standing and facilitate them in raising capital. He said that the caretaker government’s measures regarding Afghan transit trade and preventing smuggling have had a positive impact on the stock market.
Fad Waheed, Senior Vice President, Islamabad Chamber of Commerce, highlighted the issues being faced by SMEs in getting funding. He said that the high-interest rate has crowded out the private sector from credit facilities and stressed that PSX should provide attractive investment options to facilitate their growth.