Islamabad, Pakistan – The State Bank of Pakistan (SBP) has announced the launch of a challenge fund for local small-and-medium enterprises (SMEs). According to their latest circular, SBP instructs local banks to develop innovative technological solutions to cater the banking needs of the SME sector. In addition, this will also enable the SME sector to increase the access and usage of digital financial services.
Said challenge fund will be focusing on developing SME banking solutions, digital payment solutions for SMEs, developing e-commerce or online marketplace, and digitising loans application and credit management.
The grant size will be determined according to the financing requirements of the proposal under consideration. However, each grantee will contribute 15% of the total cost. Depending upon the quality and innovations of the proposal, the grant size can vary, however one bank will get only one grant.
The duration of the projects to be implemented through CFS grant should not exceed 8 months.
In addition, commercial banks–both conventional and Islamic, are eligible to apply for grants under the fund. Banks can also apply in partnership with non-banking financial Institutions (NBFIs), fintechs, electronic money institutions (EMI) and software houses. However, lead responsibility will rest with the applicant bank.