Centre, Sindh push for SME growth

Join forces to revive the Kunri red chilli processing unit, modernising the chili value chain

KARACHI:

Chief Minister Murad Ali Shah and the Prime Minister's Special Assistant on Industries and Production Haroon Akhtar met to strengthen strategic cooperation between the federal and provincial governments to boost small and medium enterprises (SMEs) in Sindh. The session at the Chief Minister's House brought together senior officials from both sides to discuss investment, industrial growth, and coordinated support for the SME sector.

Discussions focused on addressing key challenges faced by SMEs, including limited access to finance, high production costs and overlapping institutional mandates, while leveraging provincial initiatives to accelerate industrial growth.

A major outcome of the meeting was a joint commitment to revive the Red Chili Processing (Dehydration) Unit in Kunri, a project already approved by the boards of SMEDA and the Sindh Enterprise Development Fund (SEDF). The chief minister said the collaboration aims to modernise the chili value chain, a critical requirement for one of Sindh's most important agricultural clusters.

CM Shah described the Sindh Enterprise Development Fund as a cornerstone of the province's economic strategy. He pointed out that lack of collateral, complex procedures and the absence of SME-focused banking networks continue to hinder access to credit. He noted that in June 2025, the State Bank of Pakistan discontinued its SME refinance schemes that had provided subsidised loans at around six per cent.

The chief minister also highlighted that varying definitions of SMEs across institutions create confusion and increase compliance burdens, while a complex tax regime-particularly for manufacturing units-discourages registration and growth. Rising energy tariffs, raw material prices and logistics costs, he said, have further squeezed profit margins.