KARACHI: The State Bank of Pakistan (SBP) announced it had enhanced its coronavirus-related concessional loan facility to cover manufacturers of protective gears and equipment and medical facility with an expansion plan under the scheme.
The central bank said the scheme now allows manufacturers of protective gears and equipment, including items such as masks, dresses, testing kits, hospital beds and ventilators to avail financing under the refinance facility to combat COVID-19 (RFCC).
“To cope with the rising needs of the health facilities in general in the country, SBP has allowed hospitals serving patients even other than COVID-19 to avail this facility,” it said in a statement.
“Refinance facility will be available for setting up or expansion of the existing hospitals fulfilling minimum specified standards. For setting up new hospitals under this scheme, payments will be released by the banks on completing relevant milestones.”
RFCC is a highly subsidised facility where SBP provides refinance to banks at 0% whereas banks can keep a maximum margin of 3%. Some of the banks treating this as part of their corporate social responsibility are keeping margins very low.
In March, the SBP had introduced a refinance scheme, titled RFCC, to support the hospitals and health sector for providing services to directly fight against COVID-19. Under the scheme, banks provide concessional loans at a maximum end-user rate of 3% for five years for hospitals and medical centres to purchase medical equipment and set up isolation wards for developing capacity and supporting the health sector in the fight against coronavirus.
The benchmark interest rate has already been reduced to 7% from 13.25% in early March. Since its inception up till July 2, Rs6.4 billion of concessional credits have been approved for hospitals and other eligible facilities to fight COVID-19.
“Keeping in view the encouraging response and the potential to help develop the health facilities in the country, SBP has now expanded the scope of this refinance facility further,” said the central bank.
The refinancing scheme is part of other financial assistance announced by the central bank to lend a helping hand to banking customers in these challenging times.
The SBP announced three measures to address the economic and health challenges posed by the spread of the COVID-19: interest rate cut, refinancing scheme and temporary economic refinance facility. The central bank earmarked more than Rs100 billion in concessionary loans for manufacturing and health sectors to help them combat coronavirus challenges.