It is widely held that the import of consumer durables is impeding the domestic industry. In the case of home electronics, smuggling of Korean and Indian TV sets – via Dubai and Afghan Transit Trade route – and under-valuation and under-invoicing of Malaysian and Chinese air conditioners have put the local industry under stress.In the lower-end of the market, the demand for fans has fallen substantially because of extreme load-shedding in Punjab.
The State Bank observed that although the economy has shown some recovery in terms of GDP growth, the key macro indicators still remain weak
State Bank of Pakistan Governor Yaseen Anwar addressing at national roll-out of Microfinance-exclusive Credit Information Bureau (MF-CIB) at SBP Learning Resource Centre said that Microfinance-exclusive Credit Information Bureau will help Microfinance Banks (MFBs) and Microfinance Institutions (MFIs) in developing robust risk management system and practices, which in turn reduce the risk of multiple borrowing and loan defaults.
He said the MF-CIB will open access to credit for millions of potential poor borrowers and reduce the credit risk cost of the lenders, besides lowering the loan price for the borrowers.Anwar pointed out that at present even the credit-worthy borrowers of microfinance institutions face difficulty in accessing larger loans from MFBs or commercial banks due to non-availability of their long history of loans and timely repayments with a microfinance institution.
‘The MF-CIB will facilitate in the ‘graduation’ of such livelihood-based workers into small entrepreneurs,’ he added. He said that this nation-wide MF-CIB will be a major step for both lenders and borrowers with positive impact. ‘As the CIB expands its operations across the country, the quality and efficiency of the loan appraisal process will improve significantly, he added.SBP believes that a policy framework for credit bureaus is essential for their smooth and long-term growth, he said., adding that the Government and SBP have already been working on the development of a legal framework, which will strengthen private CIBs by establishing criteria for licensing, issuing regulations, and creating oversight mechanism. ‘All this will result into stakeholders’ satisfaction, and, most importantly, it will boost public confidence,’ he added.
Governor SBP urged upon the CEOs/ Presidents of MFBs and MFIs to improve corporate governance, management structures and put in place adequate systems & policies in their respective organizations for ensuring protection of consumer rights. SBP is already in the process of revising regulations to ensure that MFBs follow best standards in these critical areas, he said and added: ‘We count on your wisdom and commitment to reach out to millions of financially excluded people.’ SBP encourages that credit growth should be fairly distributed across all economic, social, and geographic segments of the target market. ‘The MFBs and MFIs should develop innovative credit methodologies and appropriate risk management policies to maintain growth and quality of loan portfolios,’ he added. It may be pointed out here that the MF-CIB is a joint initiative of the SBP, PMN and PPAF, with funding support from the DFID under its “Financial Inclusion Program” being managed by the SBP.
The statement of Governor SBP is significant as it highlights one of the biggest hurdles in business activities. If getting access to business loan is made easier then the target of fast-paced economic development can be achieved. The political upheavals in the country are the biggest hurdle in the promotion of business activity.
The country's political situation is before everyone. After the Supreme Court decision YousafRazaGilani has been disqualified and a new prime minister is in place. Due to political upheavals the investment situation is not feasible and ideal. Load shedding has destroyed the industry and unemployment is on the rise. The load shedding problem does not seem to end.
Pakistan’s financial penetration is the lowest in the world and 56 percent of its population is completely out of it while 32 percent have informal access. Currently, people who have access to loans from microfinance are facing great difficulty in getting loans.
The reality can’t be denied that until political stability is achieved business activities can’t gain the momentum. Investors always prefer countries that are politically stable and have ample energy resources. Although Bangladesh and Sri Lanka are not developed countries, they have achieved political stability due to which investors are turning to them. If Pakistan achieves political stability and solves the problem of energy crisis then business activities would gain momentum.