KARACHI, Dec 21: Suggesting the leasing companies to focus on the small and medium enterprises and agriculture sectors, Governor State Bank, Dr Ishrat Hussain has clarified that the leasing companies can go for house finance or real estate leasing ventures.
Talking to the reporters, after a meeting with the Leasing Association of Pakistan here on Friday night, Dr Ishrat Hussain said that there was vast scope for the leasing companies in SMEs and agriculture especially for machinery, equipment, etc., which was direly needed in our society.
He said these were the sectors which face difficulties in getting loans from the commercial banks and the leasing companies can take benefit of this weakness of the banks to find their clients. He hoped that the added liquidity to the SME sector and farmers, will help boost the productivity and enhance national exports.
Governor State Bank, flanked by Javed A. Callea and Bashir Chaudhry, Chairman and Vice Chairman of the Association, said the commercial banks have too much liquidity but they cannot match the leasing companies in expertise and focussed approach for the target market.
Responding to a question, he said the banks were too big institutions and it would not be feasible for them to get themselves involved at smaller levels where these companies can make a difference.
About the house financing and real estate leasing, he said that the leasing companies require certain systems and expertise before opting for such ventures. “I hope they will be doing it in due course,” he added.
He assured them that the central bank would sympathetically consider their plans or suggestions if the Leasing Association brings some tangible proposal as to help them flourish and have level playing field.
Javed Chaudhry informed the reporters that a delegation of the Association has left for Sharjah to make a presentation about the opportunities in leasing business before the 57 representatives of OIC (Organization of Islamic Conference), who had gathered there to attend the private investment conference. “We are trying to attract the Islamic countries so that adequate funds could be generated,” he added.
Dr. Ishrat said that the leasing business by the commercial banks can never be as vast as it can be in the case of leasing companies. How many cars in a year can be produced and financed, he asked. Whereas the leasing companies can help the SMEs to upgrade their machinery, dyes, tools, buy tractors and other farm machinery for growers, he added.
