Karachi, April 03, 2016 (PPI-OT): The Union of Small and Medium Enterprises (UNISAME) has proposed to the Institute of Bankers of Pakistan to develop an SME Vendors Credit Card (SME-VCC) for the benefit of the vendors who are supplying goods to the large sector under contractual arrangements of deferred payments.
President UNISAME Zulfikar Thaver said the SME vendors are borrowing money from the unauthorized money lenders against firm orders and also bills receivables at high rate of mark up which is increasing their cost of finance and leaving them very little profit. He said the commercial banks could accommodate the vendors by issuing them the SME-VCC to enable them withdraw money to pay for their raw materials and adjust the borrowed amount on receiving payment from the purchaser.
Many SME vendors are supplying auto parts to the big vehicle assemblers/ manufacturers, value added textile items and packing materials to the big factories and also light engineering goods to the big mills. Almost all the big corporations have their vendors who are supplying quality goods as per bench mark determined by them.
The SME -VCC would facilitate the vendors by enabling them to purchase the raw material, pay their workers, utility bills and transportation expenses through the SME-VCC. This facility is actually bridge financing and in vogue in many countries of the world.
The SME-VCC limit would depend on the rating of each vendor and the size of the orders and past performance of the vendor. The modalities could be worked out by the Institute of Bankers by their experts or by the commercial banks themselves. UNISAME experts have expressed the need for this product in Pakistan for the benefit of the micro to medium sized sector and are confident it would go a long way in the promotion and development of the sector.
For more information, contact:
Union of Small and Medium Enterprises (UNISAME)
75/1 3rd Commercial Street,
Phase IV, D.H.A., Karachi, Pakistan
Cell: +92-300-8245307, +92-321-8245307