Government Initiatives Schemes History

SMALL & MEDIUM ENTERPRISES:

The scheme was launched by GoKP on 05.03.2012 for advancing loans to Small and Medium Enterprises in the province in collaboration with KP Chamber of Commerce and Industry, Peshawar. Advances shall be provided for working capital requirements and purchase of machinery/equipment and balancing, modernization & replacement (BMR) as per 40% for Trade and Services Sector & 60% for Industrial Sector. Working Capital Loans: Working Capital loans shall be provided to SME and Trading & Services Sectors as under: Type Running Finance Maximum Loan Size - Trading & Services Sector Rs.300,000 - SME Sector Rs.500,000 Tenure 3 Years only Markup 9% per annum Security Two PGs and recommendation from KPCCI Demand Finance DF loans shall be provided to SMEs who intend to rehabilitate their existing units by additional machinery or fixed investment Type DF Maximum Loan Size Rs.1.5 million Tenure 5 Years Markup 9% per annum Grace Period 18 months Security Two PGs and recommendation from KPCCI, equitable mortgage

YOUTH CHALLENGE FUND SCHEME HIGHLIGHTS

Applications Status (as of 29.11.2016)

Executive Summary of BoK Micro Finance Initiatives

The economic landscape of the province Khyber Pakhtunkhwa is characterized by a number of small & medium scales economic activities which are scattered throughout the province. However, financing & business needs of these entities previously had not been streamlined. The most eminent reason among many was not having a formal financial framework due to which most of the small scale entrepreneurial entities were left exclusive. Micro Financing is attributed as an effective driver in economic uplift. BoK, since 1995, despite stark challenges, felt a dire need to converge efforts on this informal but significantly potential sector. BoK for the mentioned purpose spearheaded indigenously in diversifying its scale of operations with a Financially Inclusive strategy to encompass the left outs of the formal financial circuit. A dedicated unit was set for the investment and uplift policies of the aforementioned sector and launched diversified sector-oriented products & services – primarily targeting rural base- in collaboration with local and international partners through financial & technical assistance:

• Asian Development Bank (ADB)
• International Fund for Agricultural Development (IFAD)
• German Development Bank (KFW)
• Swiss Agency for Development Cooperation (SDC)
• Pak-Swiss SSEP
• World Bank

In succeeding years, BoK’s micro-financing unit extended its portfolio from sector-based initiatives to individuals that had encouraged the informal sectors of self-enterprising: financially & entrepreneurially, that are now grown into sustainable cluster based ventures. Hitherto, BoK successfully brokered bilateral initiative with Government of Khyberpakhtunkhwa for inculcating micro scale sustainable socio-economic uplift via fostering self-enterprising. The comprehensively successful implementation of the initiative, throughout the province, procured formidable recognition to the services of BoK. The successful endeavor helped in implementing similar broad spectrum initiatives for catering to various individual needs. Apart from individuals, sector-based uplift programs i.e. Industrial Revitalization and Alternate Energy Production initiatives were executed by GoKP via BoK. BoK is also in liaison with GoKP for another pioneering milestone of launching Micro-Finance product under the Islamic injunctions that would prove to pay its highest dividends in the coming future. By leaps and bounds; the erstwhile unit of Micro-Financing has now transformed into a full-fledged division: Islamic Micro Finance and Government initiatives, with five operational departments and outreach to the most remote districts of the province. It is the untiring efforts, dedication, and acknowledgment of IMF& GID that it is in now acting as a catalyst in drafting the Foreign Aid Strategy to GoKP. Thus, BoK is now a pioneer public sector bank with a dedicated arm to provide financial and entrepreneurial-advisory and expertise related to Micro & Medium Scale Financing. The Bank is mandated by its Act to support socio-economic development processes Lack of institutional framework for delivery of micro credit 90% of provincial economy is based on micro enterprises with no access to Financial Services

• Micro finance can provide profitable business opportunities to the bank
• Provide impetus to economic activity at the gross root level through equitable distribution of resources

Mission Statement

To be the largest Micro Finance Institution in NWFP on sustainable basis.

Objectives

• Improved access of credit to low-income and disadvantaged segment of the society
• Poverty alleviation through Micro Finance Services.
• Contribute to the improvement of employment opportunities in the province.
• Promote income generating activities with emphasis on smaller and diversified loans for women.

Outreach Mechanism

• By targeting individual entrepreneurs and cluster based activities through field staff.
• Delivery of financial services through RSPs and NGOs especially in rural areas.
• Wholesaling of funds to NGOs and RSPs for on-lending.

Bank’s Past Microfinance