To attract investment in the industrial sector and generate employment opportunities for the youth, KPK is going to announce a 10-year long generous incentives loaded new industrial policy.A draft of the policy called KP Industrial Policy 2020-30 has already been shared with the business community. Through this, the provincial government will offer proposed fiscal, financial and non-financial incentives that would be applicable on all industrial estates, industries outside estates and on industries established. Moreover, for women entrepreneurs, the government of Khyber Pakhtunkhwa would finance 25% of the equity investments subject to maximum of Rs.3 million. Under the Industrial Policy 2020-30, the provision of one-window facility will be operated jointly by the KP Board of Investment and Trad.
Under the policy, the provincial government will also be offering Shariah compliant credit incentives for small and medium enterprises (SMEs) on the basis of SBP Refinance scheme. The maximum financing will be up to Rs.20 million to SMEs on 6% mark- up per annum (2% share of SBP and 4% share of commercial bank) for modernization of existing units or setting up of new SME units, against local purchase/import of new machinery for maximum tenure of 10 years including grace period of six months.
The financing will be available to SME on 2% mark-up, rest of 4% will be borne by the provincial government e.g. against the financing of Rs.12.5 billion.
Inshort, the provincal government will bear Rs.500 million per annum for mark-up and for this purpose. The provincial government will sign a formal memorandum of understanding (MoU) with the State Bank of Pakistan (SBP) and agreement with the BoK.
