Small and Medium Enterprises (SMEs)


Small and medium enterprises (SMEs) play an important role in economic and social development of Pakistan. They foster economic growth, generate employment and contribute to the development of a dynamic private sector. In Pakistan SME sector is not only the minor sharer till yet, reality is that Pakistan’s whole economy is highly dependable on the pace and productivity of SMEs.

DEFINITION OF SME AS PER SBP PRUDENTIAL REGULATIONS (SMALL & MEDIUM ENTERPRISE)

ParameterSmall EnterpriseMedium Enterprise
Number of Employees Up to 50 including contractual employees Manufacturing & services – 51-250 (including contractual employees)
Trading – 51-100 (including contractual employees)
Annual Sales Turnover Up to Rs.150 million Above Rs. 150 million and up to Rs. 800 million
Maximum Exposure Small Enterprise can avail exposure up to Rs. 25 million (net-off liquid assets) from a single Bank/DFI or from all Banks/DFIs Medium Enterprise (ME) can avail exposure up to Rs.200 million (net-off liquid assets) from a single Bank/DFI or from all Banks/DFIs.

ROLE OF BOP FOR BOOSTING SME SECTOR

The Bank of Punjab is playing its due role in supporting Small & Medium Enterprise sector. In year 2013, BOP created SME Financing Department (ex Retail Asset Division) to specifically cater the financial needs of Small & Medium Enterprises. This department has its representation in twelve (12) Regions of the bank which covers not only the entire thirty four (34) Districts of the Punjab but also covers its representation in other Provinces of Pakistan. As such this department has wide array of products & services specifically tailor-made to cater the needs of Small & Medium Enterprises. This department is manned with dedicated team of professionals who have been provided adequate training to assess and evaluate business of Small & Medium Enterprises.

SME PRODUCTS

Keeping in view the importance of SME sector, The Bank of Punjab has offered various lending products & Services to cater to the financial needs of the Small & Medium enterprises with a special focus on SE customers.

PURPOSE FOR FINANCING

Financing is being offered to SMEs for the following purposes:

  • Managing day to day business cash flows
  • Expanding business
  • Buying raw material, stocks
  • Buying machinery and new equipment
  • Trade finance
  • Assuring payments from your inland and overseas clients through trade finance (import, export & guarantees)

PRODUCTS OFFERED

BOP offers both funded and non funded facilities for SME businesses

FUNDED FACILITIES
RUNNING FINANCE (RF)
Purpose of Facility For Working Capital Requirements
Limit Amount Limit will be allocated as per business requirements/needs
Tenure of Facility Up to One Year (Renewable upon expiry)
Repayment Principal:Through internal cash generation / sale proceeds on or before the expiry date or as per bank's demand
Mark-Up :Monthly/Quarterly as per agreement
Pricing/ Mark up Market competitive pricing will be offered
Annual Cleanup Compulsory minimum for consecutive three working days
Security/Collateral
  • Hypothecation of business stocks
  • Mortgage of Residential/Commercial/Industrial Property
  • Personal Guarantee of sponsors/mortgagors
CASH FINANCE (CF)
Purpose of Facility To provide working capital and/or seasonal financing against pledge of stocks/goods
Limit Amount Limit will be allocated as per business requirements/needs
Tenure of Facility On Demand
Repayment Principal:Through internal cash generation / sale proceeds on or before the expiry date or as per bank's demand
Mark-Up :Monthly/Quarterly as per agreement
Pricing/ Mark up Market competitive pricing will be offered
Security/Collateral
  • Pledge of Inventory
  • Mortgage of Residential/Commercial/Industrial Property
  • Personal Guarantee of sponsors/mortgagors
TERM FINANCE/DEMAND FINANCE (TF/DF)
Purpose of Facility To finance the fixed assets (project development or expansion, balancing modernization replacement etc)
Limit Amount Limit will be allocated as per business requirements/needs
Tenure of Facility Up-to 07 years max.
Repayment Principal: Principal will be paid in monthly/quarterly installments as per agreed terms
Mark-Up :Monthly/Quarterly as per agreement
Pricing/ Mark up Market competitive pricing will be offered
Facility Review Facility will be reviewed / renewed annually depending upon the repayment behavior, market conditions, and company’s performance and SBP regulations.
Prepayment Allowed with commitment charges@5% (flat) on the balance amount with one month notice in advance.
Security/Collateral
  • Post dated cheques of installments
  • Mortgage of Residential/Commercial/Industrial Property
  • Personal Guarantee of sponsors/mortgagors
LEASE FINANCE (LF)
Purpose of Facility To purchase plant &machinery, equipments etc for business purpose
Limit Amount Limit will be allocated as per business requirements/needs
Tenure of Facility Up-to 05 years max.
Lease Key Money As per bank’s policy
Pricing/ Mark up Market competitive pricing will be offered
Repayment Principal: Principal will be paid in monthly/quarterly installments as per agreed terms
Mark-Up :Monthly/Quarterly as per agreement
Facility Review Facility will be reviewed / renewed annually depending upon the repayment behavior, market conditions, and company’s performance and SBP regulations.
Prepayment Allowed with commitment charges@5% (flat) on the balance amount with one month notice in advance.
Security/Collateral
  • Title of Leased Assets
  • Post dated cheques of lease rentals
  • Mortgage of Residential/Commercial/Industrial Property
  • Personal Guarantee of sponsors/mortgagors

FINANCING AGAINST GOLD BULLION/GOLD ORNAMENT(S) [“SONEY PE SOHAGA”]

ParticularsBank’s Policy
About Scheme

The Bank of Punjab has offered following finance facilities to their customers under this scheme

  • Running Finance
  • Cash Finance
  • Demand Finance
Features
  • Age limit --- 18-60 years
  • Limit Amount
    • Minimum Rs. 50,000/- (Rupees Fifty Thousand only)
    • Maximum Rs. 50,000,000/- (Rupees Fifty Million only)
  • Tenor--- May vary from ON DEMAND to 05 years specifically mention against each facility therein.
  • Margin --- at least 35% for Drawing power calculation
  • Mark-up Rate--- Relevant KIBOR + at least 350 bps p.a.

BOP RAPID FINANCE

BOP Rapid Finance is the only business loan designed to meet your business’ urgent financial needs on priority basis. This product offers cash collateralized loans in form of short term, funded and non-funded facilities.

Product Features
Processing Fee Nil
Turnaround Time
  • 1 Day for BPP Accountholder
  • 3 Days for Non-Accountholder
Tenure

3 Months to 1 Year with rollover facility

Financing Limit Rs. 0.5 Million to Rs. 500 Million
Collateral Requirement Deposit in Current Account, Saving Account, Term Deposit Receipt & Government Securities
Pricing Market Competitive
Special Feature Financing up to 95% of your deposit

** Terms and conditions apply


TRADE RELATED /NON-FUNDED FACILITIES

In order to facilitate trade business of SMEs, Following trade facilities are offered to customers, which allows them to conduct their business with ease and efficiency.

  • BANK GUARANTEE (BG)/LETTER OF GURANTEE (LG)
  • LETTER OF CREDIT (Sight/Usance) for both local and foreign transactions
  • BILL PURCHASE/ BILL DISCOUNTING
  • FINANCING AGAINST IMPORTED MERCHANDISE (FIM)
  • FINANCING AGAINST TRUST RECEIPT (FATR)
  • SBP EXPORT REFINANCE SCHEME (ERF I/II)
  • FINANCE AGAINST PACKING CREDIT
  • FINANCE AGAINST FOREGIN BILLS (FAFB)
  • FOREIGN BILL PURCHASE
  • INLAND BILL PURCHASE (IBP)(IBP)

SBP REFINANCE SCHEMES

  • Export Finance Schemes Download
  • Financing Facility for Storage of Agricultural Produce Download
  • Long Term Financing Facility (LTFF) for Plant & Machinery Download
  • Refinancing Facility for Modernization of SMEs Download
  • Scheme for Financing Power Plants Using Renewable Energy Download

DOWNLOADS (ENGLISH):

  • Loan Application Form Download
  • Borrower Basic Fact Sheet for Small Enterprises (SE) Download
  • Borrower Basic Fact Sheet for Medium Enterprises (ME)Download

DOWNLOADS (URDU):

  • Loan Application Form Download
  • Borrower Basic Fact Sheet for Small Enterprises (SE)Download
  • Borrower Basic Fact Sheet for Medium Enterprises (ME)Download
This page last updated on: January 13, 2017 2:35:00 PM
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