SEDF is in the process of launching a BMR scheme for the ailing Rice Husking Mills in collaboration with State Bank of Pakistan and Participating Financial Institutions (PFIs).
Currently, there are about 800 Rice Husking Units which were established in the 1960s and 70s installed with old Iron-Hullers for husking .
If compared with rice producing countries like Thailand, Vietnam, China and Japan, most of the mills have outdated technology with operational losses as high as 40%.
SEDF’s objective is to modernize and restructure Rice Husking Units throughout Sindh in phases.
The scheme entails 30% Credit Guarantee and subsidy of 6.25% credit guarantee and against refinance rate. The applicant is expected to pay bank spread which is 3-4%.
BMR of 100 mills will require approximately a debt of Rs. 1000 million to be provided by the SBP under its Refinance Scheme @ 6.25%.
SEDF is proposed to provide 30% of the loan guarantee and pick up the SBP interest.
The grantee will pay the credit back together with the Bank spread of 2.75%.
Loan sizes will differ from case to case however on an average, these will range between Rs. 7 to Rs. 15 million and in few cases these may be slightly higher. The average payback period is expected to be 3 years, however, in some cases these can be 5 year tenure.
The overall scheme will work in a manner where SEDF will place the 30% guarantee funds amounting to Rs. 300 million with SBP and it would pick up the cost of Refinance of 6.25% primarily from the return on the placement of these funds.
Bank Requirements to Avail BMR Scheme Facility