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KARACHI: The Union of Small and Medium Enterprises (UNISAME) urged the commercial banks to follow the prudential regulations of the State Bank of Pakistan (SBP) in letter and spirit and interpret the true meaning of the word 'collateral ' in the right perspective as SME financing is the best avenue for the small banks.
President Unisame Zulfikar Thaver speaking on a local business channel said "Collateral" means any security offered against loan and includes movable and immovable property and also includes personal guarantee, inventory, bills receivable, goodwill of the firm, commercial value of brands and other assets such as goods in transit, unfinished goods and raw materials.
He said the SMEs are facing difficulties in obtaining finance from the banks due to banks insistence on treating only immovable property as collateral. He urged the banks to finance the small sector on cash flow basis and take into account the income of the enterprise and the ability to repay which is of primary importance. -PR
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