Zero KIBOR may attract private sector to fund academic R&D. Universities of Pakistan have played a major role in the progress and advancement of human assets by producing highly competent professionals. Research & development has been constrained due to lack of participation of the private sector.
Prevailing situation of Covid 19 have build trust over scientists and engineers by providing immediate solutions like oxygenators, Personal Protective Equipment’s (PPEs), vaccines during this pandemic.
This trust can be further strengthened if private sector can play its role better but the present constrained profitability and revenue streams of the private sector are unsurmountable hurdles, which State Bank of Pakistan (SBP) can resolve.
At this time of Corona Virus, the universities have great ideas for indigenization to save foreign exchange and industrialize the country but lack of funding from the public and private sector is a major obstacle.
There is a new wave of interest in local R&D between the private sector and the academia but the present constrained profitability and revenue streams of the private sector are unsurmountable hurdles, which we SBP can resolve.
Higher Education Commission (HEC) being the custodian of academia can suggest notification from SBP with the following points. KIBOR at 0% with spread not more than one percent. This facility to be availed by private sector and listed public sector companies who are incorporated under the laws of SECP only.
Further the companies who have three years of audited accounts approved by their respective Board of Directors. Companies having NTM and STN. The amount of borrowing may not exceed Rs 500 million.
The application to the banks needs to carry Board resolution stating approval to borrow funds for R&D. The banks should disperse the funds to the universities nominated by the borrowers and the tenure of the notification to be three years subject to extension.
Indeed, it will be great service to the nation and unemployed youth by starting new avenues of industrialization.