According to one of the reports released by the State Bank of Pakistan (SBP), it has been stated that the Sindh government will pay 3.25 percent as mark-up subsidy on loans for modernizing and upgrading rice husking mills in the province. Further, in this regard, the SBP informed that with effect from July 1, 2015, mark-up rate for the subject facility would be 6.0 percent for financing up to five years, as applicable under SBP’s Refinance Facility for Modernization of small and medium enterprises. However, the SBP has also revealed that the end-user rate would continue to be 2.75 percent per annum, while the difference between the facility rate and end-user rate (3.25 percent), being SBP’s refinance rate would be borne by the Sindh Enterprise Development Fund (SEDF) accordingly.
Moreover, in order to encourage and incentivize banks under the subject scheme, SEDF decided to pay 1.5 percent in addition to 2.75 percent (already being paid as banks margin under the scheme), to the concerned banks through the SBP. According to the previous notification issued in March 2013, the mark-up subsidy was 6.25 percent due to the high mark-up rate of nine percent; the rate for end user remained 2.75 percent. Meanwhile, the central bank also reduced the mark-up rate for other financing schemes. Under the scheme, the maximum loan size for a single borrower is Rs10 million.