Women’s empowerment to change economic landscape

CCP chairperson stresses need for enforcing competition principles

ISLAMABAD:

Competition Commission of Pakistan (CCP) Chairperson Rahat Kaunain Hassan has stressed the need to promote women’s economic empowerment as it will change the country’s economic landscape.

She was addressing the opening session of a seminar held in connection with the International Women’s Day to discuss the crucial role of small and medium enterprises (SMEs) in the economy with special focus on contributions and challenges faced by women entrepreneurs.

The theme of the seminar was “Women in SMEs: Challenges and Way Forward” and it was attended by a wide array of stakeholders including the representatives of small businesses, chambers of commerce and industry, commercial counsellors of foreign embassies, women-led SMEs and regulators, said a CCP press release on Thursday.

The CCP chairperson highlighted the critical role of SMEs in driving economic growth.

She explained that the choice of SMEs as the seminar’s theme was due to their impact and estimated contribution of up to 40% of gross domestic product (GDP) to the economy and because of they being one of the key components of CCP’s strategic vision 2020-2023.

While discussing the country’s economic challenges, she emphasised the importance of enforcing competition principles in such times of crisis as a necessity.

The CCP also presented its draft report on “Improving Economic Efficiency of SMEs.” The report identifies access to finance as a major barrier to SMEs.

A survey of 50 financial institutions (FIs) was conducted in 2021 which showed that only 30 out of 50 provided credit to the SME sector. Among the 30 FIs, the lending was skewed towards medium enterprises and only two were able to achieve the indicative lending targets set by the State Bank of Pakistan (SBP) for the sector.

The SBP prepared National Financial Inclusion Strategy (NFIS) in 2015 in which the SME sector was identified as a priority sector and the target set for SME lending was 17% of private sector financing, to be achieved by 2020.

However, the SME lending was only 5.40% of private sector lending in September 2022 and over the last five years the lending remained between 6-7%.

The report recommends that the targets need to be enhanced and aggressively followed. The report also emphasises the need for an SME Act, an effective SME banking network with focused SME desks, as well as redefining SMEs to include micro-enterprises with distinct thresholds as per global standards.

Addressing the session “Empowering Women Entrepreneurs in Pakistan: Challenges and the Way Forward,” Base6 Private Limited Founder and CEO Dr Farah Faris Qureshi urged the government to simplify policies and provide an enabling environment for small businesses in the health sector, particularly those run by women.

Published in The Express Tribune, March 10^th, 2023.

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