Prime reason for limited access to loans is incomplete planning: Shabbar Zaidi

ISLAMABAD: The chairman of Federal Board of Revenue (FBR), Shabbar Zaidi, has highlighted the reasons for limited access to loans for small and medium-sized enterprises (SMEs) due to lack of planning, ARY News reported on  Tuesday.

Shabbar Zaidi, in his statement to the media, elaborated that the low rate of loans to the small and medium-sized sector is witnessed due to undocumented businesses which restricted the SMEs to acquire more loans.

The FBR chairman said that the current figure of industrial and commercial consumers stands at 3.1 million including 43,000 registered as sales taxpayer. He added that the loan rate would not go up until complete documentation of small and medium-sized business sector.

 

Shabbar Zaidi complained the people belonging to the SMEs sector are apparently not willing to be part of the tax system. He said that the taxation system implemented in the previous tenures was quite difficult. The sector is now facing difficulties to get access to business loans, whereas, the troubles were also hiked due to the slow rate of overall loans in the private sector, he added.

He clarified that the incomplete planning was the prime reason for limited access to loans while SMEs have also introduced products without focusing its suitability for banks. Zaidi further said that the lack of documentation and cash remittance are bigger issues for SMEs which also created complications in investment.

The FBR chairman urged SMEs to focus on documentation of businesses besides being focused on the genre of products to get benefits of business loans from banks.