Ginners receive financing for machinery up-gradation

The cotton ginning sector has reasons to rejoice. The apex bank, State Bank of Pakistan announced that it would provide financing facilities to the cotton ginning factories to modernise their machinery. This credit facility is available only for replacing or modernizing machinery and equipment, said a spokesperson of the bank and will be effective as on date to December 31, 2010. The financing will be available for equipment and machinery sourced from domestic companies. However, credit will also be made available to purchase new generators up-to a maximum capacity of 500 KVA. The loan will be repayable within a maximum period of seven years, which includes a grace period of six months. Locally manufactured machinery using more than 80 percent imported components shall not be eligible for financing. The rate of re-finance up to 3 years would be 6 percent with bank’s spread of 2 percent and end user rate of 8 percent. Similarly over 3 years and up to 5 years the rate would be 6.50 percent with bank spread of 2.50 percent and end user’s rate of 9 percent. Over 5 years and up to 7 years rate would be 7 percent with bank spread of 3 percent and end user’s rate of 10 percent. Financing rates will be subject to revision on yearly basis effective from July each year.