Please refer to IH&SMEFD Circular No. 09 dated May 06, 2020 on the captioned subject.

2.    In order to further incentivize the banks to take exposure on SMEs in the current COVID-19 pandemic situation, Federal Government has approved following changes in the Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers:

S. No	Particulars	Existing Key features	Revised Features
i	Eligibility	The financing extended to businesses with maximum sales turnover of Rs 2 billion, under SBP refinance scheme to support employment and prevent layoff of workers is eligible for Risk Sharing Facility by the GOP	Financing extended to SMEs and small corporates with maximum sales turnover of Rs 2 billion, under SBP refinance scheme to support employment and prevent layoff of workers is eligible for Risk Sharing Facility by the GOP.
ii	Risk Coverage	GOP will bear 40% first loss on disbursed portfolio (principal portion only) for eligible borrowers. Note: In case of non-repayments, after being classified as ‘Loss’ (as per the classification criteria laid down under respective SBP Prudential Regulations, credit loss subsidy claim will be paid by the GOP).	i) GOP will bear 60% first loss on disbursed portfolio (principal portion only) for eligible SME borrowers with turnover of upto Rs 800 million. ii) GOP will bear 40% first loss on disbursed portfolio (principal portion only) for eligible non - SME small corporates borrowers. Note: In case of non-repayments, after being classified as ‘Loss’ (as per the classification criteria laid down under respective SBP Prudential Regulations, credit loss subsidy claim will be paid by the GOP).
iii	Security Requirements	Security arrangements will be as per executing agency’s own credit policy after taking into account the factor of this risk sharing facility. Hence, banks are encouraged to facilitate collateral deficient borrowers. In any case, banks will not be asking for additional collaterals over and above 60% of the principal amount and markup thereon.	Security arrangements will be as per executing agency’s own credit policy after taking into account the factor of this risk sharing facility. Hence, banks are encouraged to facilitate collateral deficient borrowers. In any case, banks will not be asking for additional collateral over and above the non-guaranteed principal portion and markup thereon.
iv	Cut-off date	30-06-2020	30-09-2020

3. The banks/DFIs are advised to ensure immediate compliance of revised features of ‘Risk Sharing Facility for SBP Refinance Scheme to support employment and prevent layoff of workers’ and facilitate the eligible businesses to avail financing under this facility.

4. Other instructions on the subject shall remain unchanged.