The Pakistani state bank has extended the Rozgar program scheme by another three months amid Covid 19 pandemic and has broadened its scope in partnership with the government, as per official statement.
Also known as a refinancing program to support employment and prevent layoffs from workers, the Rozgar program offers companies reduced wages and salaries if they commit not to cut their employees for the duration of the loan.
Businesses can now receive financing for a maximum of six months from April 2020 to September 2020.
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In fact, this suggests that not only can companies receive loans to finance their payroll for up to three months from July to September 2020, but they can also receive compensation for wages and payrolls from April to June 2020.
For those who have already benefited from the program, the funding limits for July to September 2020 are calculated on the same basis as the limits for April to June 2020 were calculated.
The program approved $ 112.8 billion in funding for 1,653 companies on June 19, with wages for more than 1.1 million employees.
The government had previously introduced a risk-sharing facility for SBP's Rozgar program to motivate banks to provide loans to small and medium-sized businesses. Under this facility, the government will bear an initial 40 percent loss on the paid portfolio (majority only) for eligible borrowers.
This facility has now been extended for another three months and risk coverage has increased from 40 to 60 percent.
“This increased risk coverage will help banks use the Rozgar program to provide financing to underprivileged SMEs who would otherwise struggle. SBP now assumes that more SMEs will benefit from the system, mainly as a result of greater risk coverage and awareness of the stakeholders of the system, ”the statement said.
As part of the RSF, the banks approved Rs 25.4 billion. Funding for approximately 1,100 companies as of June 19, with salaries of over 220,000 employees
