By Farhad Naibkhel-KABUL: In a bid to promote domestic manufacturing, Bank-e-Milli Afghan (BMA) signed an agreement with Kabul Industrial Council (KIC) to provide manufacturers with machinery and raw materials across the country.
Head of the BMA, Ahmad Khesraw Zia, said that signing of the agreement is aimed at enhancing cooperation between banks and industries.
Speaking at the signing ceremony, Zia said that based the agreement the BMA will provide support to domestic companies in the form of machineries and raw materials, instead of money.
“Manufacturing firms will receive the support through an Islamic banking system with lowest interest (6.5-9.5 percent),” he added.
He said that the BMA will also help manufacturing companies to standardize their financial reporting system.
“Afghanistan is a consumer country which currently imports over $7.7 billion and exports over $500 million. Thus, all banks are required to lend their support to manufacturing companies,” he added.
This is the third agreement signed between BMA and other concerned institutions. Previously, the BMA had signed an agreement with the industrial parks to give loans to manufacturing firms.
Head of the KIC, Abdul Karim Arefi, said that Afghanistan’s manufacturing sector is facing numerous challenges. He blamed the government and other concerned organizations of turning their blind eye towards the problems faced by manufacturing companies. He said that lack of the government’s support to manufacturing companies hurdles industrial growth. He said that the concerned organizations are paying them lip service and are yet to lend their support to industrial sector.
“Due to lack of government’s support, domestic products cannot compete against imported goods,” he added.
The Deputy Head of the Central Bank of Afghanistan, Khan Afzal Hadawal, banks have allocated only Afs4.7 billion to the manufacturing sector, which is not sufficient.
He said that banks should provide short, median and long-term loans to manufacturing companies.
President Ashraf Ghani’s special representative on reforms and good governance, Ahmad Zia Massoud, said that to steer the country towards self-sufficiency, the industrial sector should be supported. He directed the concerned organizations to devise special policies for support of manufacturing sector.