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SME Banking

SME Banking
At Al Baraka Bank (Pakistan) Ltd, SME Group is engaged in providing all sorts of business solutions to Small and Medium Sized Enterprises to meet their short and long term business requirements, through various Shariah compliant products and services giving them satisfaction of halal banking services. We provide working capital finance through MURABAHA, SALAM and ISTISNA and for long term requirements; we offer DIMINISHING MUSHARAKA and IJARAH for purchase of plant & machinery and Vehicles. SME clients are also facilitated in handling their cross border trade transactions through import & export.

With a wide array of services offered by Al Baraka Bank (Pakistan) Ltd, the SME sector is also facilitated with deposit services, trade finance services, financing services, documentary credit services, Import & Export Finance products, IERF Export refinance scheme, working capital, purchase of assets for trading or business promotion and long terms finance for the procurement of business assets.

Al Baraka Bank (Pakistan) Ltd offers following services to the Small & Medium Enterprises

  • SME Financing
  • SME Deposit Services
  • PMYBFS Scheme
  • Agriculture Credit ( Tractor finance Scheme)

Eligibility criteria of SME sector
Small and Medium Enterprises have been divided into two different terms; Small Enterprises and Medium Enterprises. This step taken by the State Bank of Pakistan enables us to provide more concentrated and specific services to both sectors keeping in view their business financing requirement, man power and annual sales volume.
Small Enterprises Criteria:

  • Number of Employees:Up to 50
  • Annual Sales volume:Up to Rs. 150 Million
  • Max Finance permissible:Up to Rs. 25 Million

Medium Enterprises Criteria:

  • Number of Employee: 51 to 250 (for Manufacturing & Service concern) and 51-100 (for Trading concern)
  • Annual Sales volume: Rs. 150 to Rs. 800 Million
  • Maximum Finance permissible: Up to Rs. 200 Million from single or multiple banks

Product Details

  • Trade Related Services
  • L/C Sight
  • L/c Usance
  • Standby Guarantee
  • Performance Guarantee
  • Advance Mobilization Guarantee

Short Term Financing Services (Working Capital finance)

Murabaha
It is a sale transaction of goods where the seller (Bank) discloses the cost and profit to its buyer at the time of execution of sale. The Bank purchases the products from market through its agent which can be the customer himself and subsequently sell it him on spot or deferred payment.

Istasna
It is a short term finance facility in which the Bank orders the manufacturers to manufacture goods as per the agreed specifications of local or foreign buyers. The goods are then delivered to the bank, after the delivery the bank sells these goods locally or exported by the customer acting as bank’s agent.

Salam
This financing product caters the working capital requirements of the customer by purchasing the finished goods from the customers. It is for those customers who sell their finished goods on credit basis and need funds for the operational activities of the business including procurement of raw material, wages and other overheads. In this product bank purchases the finished goods from the customer on cash basis and sell the goods in the market through its agent, which may be a customer himself.

Tijaraha
Tijarah is a working capital finance solution through purchase of finished goods from the customer. It is for those customers who sell their finished goods on credit basis and need funds for the operational activities of the business. These activities include procurement of raw material, wages and other overheads. In this product bank purchases the finished goods from the customer on cash basis and sell the goods in the market through its agent, which may be a customer himself.

MEDIUM & LONG TERM FINANCING PRODUCTS

There are two major products to cater the medium and long term financing requirement of the customer.
Diminishing Musharaka

It is a medium to long term financing solution, in which the customer and bank jointly purchase an asset including machinery, building, or vehicle and possess a joint asset with the customer. The bank leases its share to the customer while customer purchases the unit of ownership in the asset through periodic payment of installments. Upon the complete purchase of ownership unit, the customer becomes the owner of the assets.

Ijara
Ijara is another popular Islamic Banking product for the medium to long term financing requirement of the customers. In this product Bank acquires an asset in shape of the machinery, equipment of vehicles and then leases it to the customer for fixed period.

Value Chain Financing
Al Baraka Bank (Pakistan) Ltd also provides value chain financing facilities to the buyers and suppliers of their existing corporate and commercial customers through which the financing of the such suppliers and buyers is catered who need finance to do business with ABPL’s existing customer.

SME Deposit Services
In order to promote and encourage the SME sector Al Baraka Bank (Pakistan) Ltd is offering SME deposit services at all branches. The customers of SME Sector can maintain their current accounts, saving accounts, special saving accounts in any of the branches with their convenience.