37907-014: PAK: SME SECTOR DEVELOPMENT PROGRAM:SME GUARANTEE FACILITY COMPONENT

Project Data Sheet (PDS): Overview


Description

Pakistan's SMEs absorb more than 80% of non-farm employment. However, SMEs have yet to realize their growth potential. Currently, the small-scale industrial sector accounted for only 17.8% of the industrial sector output and 4.2% of gross domestic product. To create an enabling environment for SMEs and to realize their growth potential, the Government of Pakistan and ADB agreed to prepare the SME SDP, which is included in the 2003 Country Strategy and Program, which aims at enhancing SME competitiveness, on a sustainable basis to support income generation, employment creation, and poverty reduction. It will be the anchor program loan for the proposed PCG Facility and possibly a number of other private and public sector investments supporting SMEs. Channel financing is a mechanism that builds on a bank's network with large corporate clients to extend credit, mostly for working capital purposes, to SME suppliers and buyers of these corporate entities. The mechanism improves the creditworthiness of SMEs that are referred or endorsed by large corporations who are willing to share risks with or provide first loss back up guarantee to banks in case of the default by their SME suppliers or buyers. The proposed PCG will permit the banks to go into riskier SME markets without exceeding their current exposure limits. Read More

Country Pakistan
Borrower/Equity Investment Name
Project Number 37907-014
Project Type or Modality of Assistance PS
Financing Private sector (Nonsovereign)
Status Approved
Approval Number 7190/3709
Approval Date 18 Dec 2003
Geographical Location Karachi
Sector / Subsector Classification Finance
/ Small and Medium Enterprise Finance and Leasing
Thematic Classification Economic growth
Private sector development
Safeguard Categories Environment: FI

Results Delivered

Small and medium-sized enterprise loan accounts opened or end borrowers reached (number) 113

The results data reported above are limited to ADB's core sectors, as defined under Strategy 2020 and tracked through indicators in the ADB Results Framework. For definitions of results indicators, please see the ADB Results Framework Indicators Definition.

 

 

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Project Data Sheets (PDS)

Responsible ADB Officer
Veronica John
Email contact

Responsible ADB Department
Private Sector Operations Department

Responsible ADB Divisions
Capital Markets and Financial Sectors Division

PDS Creation Date
23 Aug 2006

Last PDS Update
14 May 2009

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