Refinance Facility For Modernization Of Small & Medium Enterprises (Se & Me)

1. Scope and Eligibility Criteria:

i) Only SE & ME borrowers, as defined in State Bank of Pakistan Prudential Regulations for SMEs, shall be eligible to avail financing facilities under the Scheme.

ii) Financing shall be available to wide range of SME Clusters / Sectors as below;
a) Rice Husking
b) Cotton Ginning
c) Power Looms
d) Dairy & Livestock
e) Cutlery & Stainless Utensils
f) Surgical Instruments
g) Marble & Granite
h) Engineering Goods & Electronic
i) Fisheries
j) Packaging / Processing of Fruits / Vegetables
k) Furniture
l) Gems & Jewellery
m) Sports Goods
n) Agro-based Industry
o) Any other

iii) Financing shall be available for purchase of new imported / local plant & machinery for BMR of existing units and setting up of new SME units.

iv) Financing shall also be available for import/ local purchase of new generators upto a maximum capacity of 500 KVA under the Scheme. The capacity of generator shall, however, not be in excess of SME Unit’s in-house energy requirements or up-to 500 KVA, whichever is less.

2. Period of Financing and Grace Period

Financing under the Scheme shall be available for a maximum period of ten years including a maximum grace period of six months.

3. Mark-up rate:

6% p.a., payable quarterly.

4. Collateral / Security:

  1. Mortgage of property with 25% margin.
  2. 1st charge on Fixed Assets of the Company with 25% margin / cash / near cash collateral.
  3. Personal Guarantee of the proprietor / partners / directors of the Company.
  4. Personal Guarantee of the Owner of the Property.

5. Repayment of the loans:

  1. Principal amount of loans shall be repayable in equal quarterly / half yearly installments after prescribed grace period, if any.
  2. In case the borrowers fail to make repayment of the amount of installment as per the original repayment schedule, the bank will be entitled to charge normal rate of mark up on such overdue principal amount besides taking other actions to recover the same as are incidental to such defaults.
  3. Mark-up shall be paid on quarterly basis.

6. Other Terms & Conditions:

  1. Financing under the Scheme shall be subject to compliance with all rules and regulations including SBP Prudential Regulations for SMEs.
  2. Financing under the scheme shall be available only against LCs in case of financing against imported plant and machinery.
  3. Second-hand machinery shall not be eligible under the scheme.
  4. Financing shall not be available for the purpose of acquisition of land, construction of building etc.
  5. Financing under the facility shall be available to the extent of the C &F value of the imported new plant and machinery and / or ex-factory/showroom price of the new locally manufactured machinery to be purchased by the eligible borrowers.
  6. Advance payment to the extent of 20% of the C&F value / ex-factory / showroom price can be made in terms of related underlying agreement by securing the bank’s interest.
  7. Disbursements by bank will not be made to the borrower directly; instead payments shall be made to the manufacturers / suppliers of the machinery.

7. Documents Required:

  1. Loan Application Form
  2. Basic Borrower Fact Sheet for Small / Medium Enterprises (SE / ME)
  3. Detailed profile of the Business
  4. Profile of the Sole Proprietor / Partners / Directors
  5. Projected Financials (Cash flows, Balance Sheet, Income Statement) equal to tenor of loan
  6. Exiting Financials for last 3 years (Cash flows, Balance Sheet, Income Statement) as follows:
    1. In case of Small Enterprises & loan amount upto Rs. 15M: Financials signed by the borrower.
    2. In case of Small Enterprises & loan amount above Rs. 15M: Financials audited by practicing Chartered Accountant or practicing Cost & Management Accountant.
    3. In case of Medium Enterprises who is a limited company & loan amount above Rs. 10M: Financials audited by practicing Chartered Accountant.
    4. In case of Medium Enterprises who is other than a public company or a private company which is a subsidiary of a public company & loan amount up to Rs. 10M: Financials audited by practicing Cost & Management Accountant.
  7. Details of the Collateral / Property
  8. Valuation Report (from PBA approved valuator) of the Property, Plant & Machinery
  9. CNIC of the Applicant
  10. One passport size photograph of the applicant
  11. In case of Private / Public Limited Company:
    1. Memorandum & Articles of Association
    2. Latest Form A
    3. Latest Form 29
    4. Certificate of Incorporation
    5. Latest Search Report
    6. Income Tax Registration Certificate
  12. In case of Partnership:
    1. Partnership Deed
    2. CNIC copy of all the partners