The Federal B Area Association of Trade and Industry (FBATI) has demanded that the interest rate on long-term loans for small and medium-sized enterprises (SMEs) be reduced to 2% annually.

FBATI President Raza Hussain has sent a letter to the State Bank of Pakistan (SBP) governor, urging the central bank to introduce a fixed-rate financing scheme for the revival of small industries.

The letter said SMEs were facing persistent pressure due to high interest rates, energy tariffs and rising taxes. It urged the SBP governor to develop a comprehensive and sustainable financing plan, specifically for small and medium-sized industries.

According to Raza Hussain, SMEs are currently being provided business loans at a rate of 2% above Karachi Inter-bank Offered Rate (Kibor), making financing for small industries extremely expensive. The FBATI said costly bank loans had made it difficult for industrialists to purchase machinery and increase production. In view of these ground realities, it urged the SBP governor to provide small industries with financing at lower rates, similar to the facilities available to exporters. The association said the growing number of closures of small units were increasing unemployment.