SMEs need attention, will help economy grow

FCCI officials discuss importance of sector; evaluating SMEDA’s performance.

Imran Rana April 02, 2016

FAISALABAD: The government should reprioritise its policies and focus on facilitating the small and medium enterprises (SMEs) sector, which is the backbone of the national economy, said Faisalabad Chamber of Commerce and Industry (FCCI) President Chaudhary Muhammad Nawaz.

Speaking at a focus group meeting held at FCCI premises to evaluate the performance of the Small and Medium Enterprises Development Authority (Smeda) from 2011-14, he said that like other industrial cities of Pakistan Faisalabad also began its journey from promoting SMEs.

Many small units, which started their operations in 1947, have now become giants and their success has enabled Faisalabad to become the third major industrial hub of Pakistan. “There are 3.2 million SMEs contributing to the Pakistani economy,” said Nawaz. “Almost 35% of them are involved in manufacturing value-added products. The segment provides employment to 78% of the workforce while their overall share in exports is 25% and 30% in GDP.”

Citing China as an example, he said its SME sector’s contribution in the economy is huge and hence, Pakistan should follow its model.

To enable SMEs to grow, Nawaz pointed out five areas that needed the government’s focus, including regulatory framework, availability of capital, technical support, training facilities and research and development. He stressed on the need to involve the private sector in policymaking regarding the SME sector.

SKP Consulting Limited Director Project Development Mustafa Zaidi, hired to evaluate Smeda’s performance, said that the world’s top 10 economies have originated from the SME sector. He disclosed that 6% of the total credit portfolio has been earmarked for the SME sector but the government is actively considering a proposal to enhance it to 8%. Zaidi also endorsed the proposal to strengthen industry-academia linkages in addition to extending more facilities to the stakeholders by Smeda.

Published in The Express Tribune, April 3rd, 2016.

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