KARACHI: In a statement released on Tuesday, the State Bank of Pakistan (SBP) said it had extended the deferment of principal until September 30.
Under this facility, businesses and households can request the deferral of their loans and advances for a period of one year, while continuing to manage the amount of the mark-up.
The decision was made in light of the fact that the Covid-19 pandemic continues to weigh on the cash flow of small and medium-sized businesses and households, according to the SBP.
As a result, this facility will be available only for the financing of small and medium-sized enterprises (SMEs), business finance, consumer finance, housing finance, agriculture finance and micro-finance.
The facility will not be extended to businesses and commercial borrowers as a significant amount of their loans and advances have already been deferred.
“It is expected that more businesses and households, which were unable to take advantage of the facility, will benefit from this extension,” the SBP said.
Earlier, on March 26, the SBP, along with the Pakistan Banks Association (PBA), announced measures to help businesses during the Covid-19 crisis.
A key measure was the deferral of the principal amount of loans and advances by banks and development finance institutions (DFIs). Under this facility, businesses and households could request a deferral of their loans and advances for a period of one year, while continuing to manage the amount of the mark-up.
The carry-over of principal should not affect the borrower’s credit history and the facility would not be reported as restructured in the credit bureau data.
As of July 3, banks had deferred Rs593 billion of the principal amount of loans for more than 359,000 borrowers. About 95 percent of the program beneficiaries were small borrowers, including SMEs, consumer credit and microfinance.