Refinance Scheme for Payment of Wages & Salaries

Refinance Scheme for Payment of Wages & Salaries to the
Workers and Employees of Business Concerns
To address unforeseen circumstances and economic strain in Pakistan’s economy amid Corona Virus pandemic on a global basis the GOP /State Bank of Pakistan in collaboration with financial sector has taken many steps including support to SME’s, Small Corporate & Corporate /Commercial clients by way of subsidise financing for discharge their liabilities for salaries and wages. Pak Libya is also contributing its share for this cause. The salient feature of the scheme are as below:
Scope & Eligibility Criteria
  • The Scheme aims to finance wages and salaries of permanent, contractual, daily wagers as well as outsourced employees for the months from April 2020 to June 2020.
  • The borrowers availing this facility will undertake not to lay off their workers/employees at least during three months from the date of first disbursement except in case of any disciplinary action.
  • Government Entities, Public Sector Enterprises, Autonomous Bodies and Financial Institutions will not be eligible under this Scheme.
  • The maximum financing limit of a borrower/customer under these schemes will be determined in the following manner:
Category Wages and Salaries Bill for 3 months Loan Limit Maximum Loan Limit
(1) (2) (3) (4)
A Less than or equal to Rs. 500 million 100% of column 2 Rs. 500 million
B More than Rs. 500 million Rs. 500 million or 75% of column 2,
whichever is higher
Rs. 1,000 million
Repayment, Mark-up & Period of Financing
  • The repayment of financing under the Scheme will start from January 2021. The repayment will be made in equal 8 quarterly installments.
  • Maximum 3% per annum (p.a.) for end users (active tax payers), while SBP will refinance to banks/DFIs at 0% markup i.e. 3% spread for banks/DFIs.
  • Maximum 5% per annum (p.a.) for end users (non-tax payers), while SBP will refinance to banks/DFIs at 2% markup i.e. 3% spread for banks/DFIs
Period of Financing and its Repayment
  • The repayment of loan (principal amount) by the borrower will start from January 2021 after disbursement period of three months followed by a maximum grace period of 06 months.
  • The repayment of loan (principal amount) will be made in 8 equal quarterly installments.
  • Mark up shall be paid on a quarterly basis. PFIs shall not be permitted to require borrowers to pay markup/service charges at a frequency of less than a quarter except at the time of pre-payments/liquidation of loan.
General Terms & Conditions / Required documents / information’s for credit assessment / Disbursement.
  • The financing under the scheme will not cover other employee benefits i.e. bonuses, sales incentives, employee benefit plans, staff retirement benefits, gratuity etc.
  • The financing is not used to make repayments/adjust the existing financing facilities.
  • The borrower will provide the details of wages & salaries along with details of workers, contractual and salaried individuals as per format (downloadable).
  • Disbursement will be made directly to the employees accounts.
  • Financials preferably last three years.
  • Last three months average salary amount reflect I financials.
  • Company profile and establishment related documents.
  • Prescribed Loan Application form
  • Complete salary detail as per format (downloadable)
  • Any other requirement during the assessment process.
 Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers
S.No. Particulars Key features
1 Eligibility
The financing extended to businesses with maximum sales turnover of Rs 2 billion, under SBP refinance scheme to support employment and prevent layoff of workers is eligible for Risk Sharing Facility by the GOP.
2 Risk Coverage
GoP will bear 40% first loss on disbursed portfolio (principal portion only) for eligible borrowers.
3 Security Requirements
Any tangible security which would be adequate and enforceable in the court of law however, borrowers are also collateral deficient borrowers are also eligible to apply subject to the satisfaction of Pak Libya. The borrower can also provide additional collaterals over and above 60% of the principal amount and markup thereon.
Please contact us in this regard via email / phone call or physical visit. We will provide you complete guidance and will facilitate in availing the facility.
Email:   111-776-776 Ext. 223

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