SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) drive economic growth by stimulating innovation, acting as a competitive spur to existing businesses to increase their productivity and making a disproportionately large contribution to job creation. BankIslami Pakistan Ltd (BIPL) is dedicated in supporting SME business with all the products and services available through its branch banking network. The products and services are offered to SME clients strictly under Shariah modes.

Eligibility

Small Enterprises

Number of EmployeesAnnual Sales Turnover Financing Allowed
Upto 50 *Upto Rs.150 MnUpto Rs. 25 Mn

* including contractual employees
However, in cases where an entity fulfills one parameter of SE and its second parameter falls within the range prescribed for medium enterprise (ME) or above the upper limit prescribed for ME, then the subject entity shall be classified as ME or commercial/corporate entity as the case may be.
* Age of the individuals/sole proprietors should be up to 60 years, deviation in the same up to 65 years can be allowed by approving authority of BankIslami.

Medium Enterprises

Medium Enterprise (ME) is a business entity, ideally not a public limited company which meets the following parameters:

Number of EmployeesAnnual Sales TurnoverFinancing Allowed (Maximum per party)
51-250 for Manufacturing and Service ME
51-100 for Trading ME
Above Rs.150M and up to Rs.800M for all types of MERs.200M (including leased assets) exposure from single or all banks.

*In cases where an entity fulfills one parameter of ME and its second parameter falls above the upper limit prescribed for ME, the subject entity shall be classified as commercial/corporate entity as the case may be.

BankIslami offers all basic banking services to suit your routine business needs.

Key Features:

  • Current Accounts with zero account maintenance fees
  • Choice of currency- PKR, EURO, USD, GBP & JPY
  • Transfer of funds with lowest transaction fees
  • Access to quick and timely foreign exchange services
  • Access to the entire online network of 317 Branches
  • Unlimited within city and intercity online transactions
  • Free Deposit and Withdrawal over the counter services at all BIPL branches

Following are the Working Capital Financing products:

Karobar finance

  • To fulfill working capital needs of the SME business engaged in manufacturing and trading of goods.

Istisna Finance

  • To fullfil working capital needs of the SME business engaged in manufacturing business only. This product is especially designed for manufacturers.

Murabahah Finance

  • Murabahah is a most renowned Islamic Fiancing product. This is mainly used for purchase of goods which mainly includes raw material. This is also used for retirement of Sight Letter of Credit.

Islamic Export Refinance

  • Islamic Export Refinance part I and part II are available for customer meeting the eligibility criteria of State Bank of Pakistan for availment of Islamic Export Refinance Scheme. This subsidized sheme is available in Murabahah and Istisna mode.

Following are the Medium and Long term financing products:

Ijarah

  • Ijarah is a contract, whereby, BankIslami will lease out an asset to the SME Client and receive periodical rentals from the Client for the use of that asset. The asset will remain in the ownership of the Bank throughout the term of Ijarah. At the end of the Ijarah term, the asset can be purchased by the client at an agreed price.

Diminishing Musharakah

  • To fulfill the commercial and industrial property requirements BIPL offer Diminishing Musharakah in which BIPL share ownership of a specific asset along with the SME Client and then gradual purchase of the client of BankIslami's ownership share in the asset throughout the term of DM while during the tenure client pays a mutually agreed rent. At the end of the Diminishing Musharakah term, Client becomes the sole owner of the asset. This product could also be used for payoff conventional banking liabilities.

Establishment of Letter of credits (Sight / Usance) and registration of Contract

  • Import requirements of BIPL SME clients are catered through opening letter of credit (Sight/ Usance) and registration of contract for import of eligible commodities from around the world.

Collection of export documents

  • Exports of SME clients are handled through L/c advising and export documents sent on collection basis to the corresponded banks across the globe.

Letter of Guarantee

  • Bid bond/performance /Advance payment letter of Guarantee are offered to SME clients for their transaction related needs for various government and private sector institutions.

Flexible pricing (floating / fixed with revision monthly/Quarterly/Half-yearly/yearly).

MODE OF PAYMENT & PAYMENT FREQUENCY

Long term: Monthly / Quarterly / Half-yearly

Short term: As agreed between client and the bank

Late Payment Charity

Charity @ 20% per annum will be received after due date which will be credited to Charity account.

HOW TO APPLY

Required Documents:

Proprietorship concern:

  • CNIC copy of proprietor.
  • Request for credit facility on letter head.
  • Basic borrower fact sheet duly signed & stamped on each page by proprietor.
  • Sole Proprietorship Declaration.
  • Personal net worth statement of Proprietor.
  • Last three years financial statements signed by Proprietor.
  • Company Profile.
  • Latest stock report.
  • Latest ageing of receivables.
  • Last six-month bank statement with other banks.

Partnership concern:

  • CNIC copy of all partners.
  • Request for credit facility on Letter head.
  • Basic borrower fact sheet duly signed & stamped on each page by authorized signatories.
  • Personal net worth Statement of all partners.
  • Last three years Financial Statements signed by authorized signatories.
  • Company profile.
  • Latest stock report.
  • Latest ageing of receivables.
  • Last six-month bank statement with other banks.

Private Limited Company:

  • CNIC copy of all directors.
  • Request for credit facility on Letter head.
  • Basic borrower fact sheet duly signed & stamped on each page by authorized signatories.
  • Board resolution.
  • Form A
  • Latest form 29,
  • Memorandum of association (MOA) & Article of association (AOA).
  • Certificate of Incorporation (COI).
  • Personal net worth statement of all directors.
  • Last three years financial statements signed by authorized signatories.
  • Company profile.
  • Latest stock report.
  • Latest ageing of receivables.
  • Last six-month bank statement with other banks.

How I/we can obtain credit facility application form?

  • Application form & BBFS can be obtained from our designated branch (list attached)

Which type of Security bank Prefer against financing?

    • Hypothecation on Current Assets (Depend type of Credit facility)
    • Pledge of Goods (Depend type of Credit facility)
    • Property Mortgage (Preferable of Urban areas)
    • Personal Guarantees of Proprietor/Partners/Directors/Mortgagor(s).
    • Counter Guarantee (Only for Bank Guarantee facility)

Is there any Islamic Banking product available as an alternative to conventional banking product of Running Finance (RF) / Overdraft?

  • Exactly not but working capital needs of the company can be catered by Karobar finance product and Istisna (specifically for manufacturers) products may be used as an alternative to meet the above requirement.

Which type of Credit facility can I avail from BankIslami?

  • We provide following Shariah Compliant Products & Services

    Short term:

    • To meet Working capital requirement of the firm.
    • Trade related business (Import / Export)

    Long term:

    • Acquisition of Plant & Machinery
    • Purchase of Commercial or Industrial Property

 

 

The Presidents/CEOs,
All Banks/DFIs

 

Dear Sirs/Madam,


Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers


    Please refer to IH&SMEFD Circular No. 06 and 07 of 2020 dated April 10, 2020 regarding SBP Refinance Scheme to support employment and prevent layoff of workers.

2. With a view to incentivize banks/DFIs for financing to SMEs and small corporates under above mentioned schemes, Government of Pakistan has approved budgetary allocation for ‘Risk Sharing Facility for State Bank of Pakistan (SBP) Refinance Scheme to Support Employment and Prevent Layoff of Workers’. Accordingly, the risk sharing facility is being provided with immediate effect, with following key features.

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.

Note: In case of non-repayments, after being classified as ‘Loss’ (as per the classification criteria laid down under respective SBP Prudential Regulations, credit loss subsidy claim will be paid by the GOP).

3

Security Requirements


Security arrangements will be as per executing agency’s own credit policy after taking into account the factor of this risk sharing facility. Hence, banks are encouraged to facilitate collateral deficient borrowers. In any case, banks will not be asking for additional collaterals over and above 60% of the principal amount and markup thereon.
 

4

Executing Agency


Banks and DFI assigned limits under SBP scheme will be eligible Executing Agencies (EAs).
 

5

Additional Measures


EAs shall develop and implement robust mechanism to ensure that the loans are utilized for intended purpose only.
 

6

Administration


Development Finance Support Department (DFSD), SBP BSC will manage operational aspects of the risk sharing facility. DFSD will submit data under the risk sharing facility on quarterly basis to the Finance Division.
 

7

Subsidy Payment


EAs shall submit credit loss subsidy claims to DFSD on quarterly basis within 15 working days after the end of each quarter. DFSD after scrutiny of the claims shall submit the same to Finance Division, GOP. FD will release payment against submitted claims within 15 working days. Upon receipt of subsidy from GOP, SBP BSC Karachi will credit the account of EAs with the subsidy amount.
 

3.  The banks/DFIs are advised to ensure immediate implementation of ‘Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers’ and facilitate the eligible businesses to avail financing under this facility.
 

Yours sincerely,

Sd/-

(Dr. Mian Farooq Haq)
Director

 

You can access the same circular via State Bank’s website by clicking on the following link:

 

http://www.sbp.org.pk/smefd/circulars/2020/C9.htm