Establishment of agro-based industries in Sindh: bank refuses to provide assistance on low interest rates

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KARACHI : The Emirates Global Islamic Bank has refused to provide the financial assistance to the Sindh government for the agro-based industries on low interest rates, it is reliably learnt. According to official sources, the finance department had sought financial assistance from the Emirates Global Islamic Bank for the establishment of agro-based industries in the province through the Sindh Development Fund (SDF) on the public-private partnership (PPP).

The officials of finance department held a series of meetings with the representatives of the Bank to reach an agreement for ensuring financial assistance for the agro-based industries. The Sindh government was insisting for the low interest rates, however, the bank authorities did not agree with the finance department s point of view and refused to compromise on the interest rates, they added.

Recently, Senior Vice President, Corporate and Investment Banking, Emirates Global Islamic Bank forwarded a letter to Special Finance Secretary Naheed S Durrani informing her that the bank was looking forward to working with the Sindh government but it would not compromise on interest rates, they said.

It is mentioned that the interest/profit rates are market driven and are decided keeping in view the inherent risks of the project. Since the Government of Sindh is only taking up the interest/profit portion of the projects and is not guaranteeing the repayment of principal amount, therefore, we shall not be in a position to compromise on the interest/profit rates especially considering that the most of these projects would be Green Field Projects, the bank s letter said.

Sources said that the Sindh government was establishing agro-based clusters in different districts of the province to ensure effective networking of transportation of agricultural produce and maintain their better quality for domestic and international markets. The clusters would also help in developing small and medium enterprises.

The clusters of mango would be developed in Hyderabad, Mirpurkhas and Sanghar, rice milling in Larkana, red chilies (Kunri), dates (Khairpur), cotton ginning (Ghotki and Sanghar), guava (Larkana) and vegetable processing in Benazirabad, Tando Allahyar and Mirpurkhas to facilitate poor growers of these district. Furthermore, sources said that finance department was expected to approach any other bank for the financial assistance so that work for the development of clusters could be started at the earliest.

Courtesy : Business Recorder


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