Small and Medium Enterprises: BSF extends Rs 60 million grants for 250 projects since 2006

The SME Business Support Fund, since its operation in 2006, has so far approved 250 projects across the country for the provision of matching grants to facilitate Small and Medium Enterprises in garments, auto parts, furniture and food processing sectors.
The BSF that was established under Company Ordinance 1984 and for which the Asian Development Bank provided about Rs 1.3 billion funds for SME Sector Development Programme had received 450 applications for matching grants out of which 250 were approved and grants worth Rs 60 million were extended to them.
The BSF provides grant up to Rs 1.8 million on 50:50 cost sharing basis to the Small and Medium Enterprises (SMEs) for hiring services regarding marketing, preparation of feasibility report, consultancy fee, ERP certification so as to enable the SMEs improve quality and standard of their products.
The SME BSF Chief Operating Officer Ali Sarfaraz told Business Recorder that the restructuring of the SME Bank was also included in the basic objectives of the BSF while the total outlay was $5.2 million that was to be spent on restructuring of the Bank.
The ADB had provided financial assistance for a period of five years till June 2009. The SMEs are usually reluctant to use financial assistance for hiring services to improve quality of their products rather they prefer to receive grant for running capital which is not under the preview of BSF, he added.
The BSF started its functions just as a pilot project so that SMEs could be encouraged to use its services, he maintained. The grant is also provided for branding, preparation of advertising material, and product's design but not for the running of media campaign, he added.
"The BSF has set up a database of 600 consultants dealing in various fields to facilitate our clients while the decision with regard to providing grant is taken by the BSF Board and a four-member Board's appraisal committee comprising public and private sector representatives approve the cases," Sarfaraz said.
He said that the BSF Board has proposed an internal performance audit system to enhance its efficiency so that its role could be strengthened for the development of SMEs in the country and a firm would be engaged in this regard by the end of this month.
Sarfaraz said that rather than restricting BSF role in urban areas and major cities like Karachi and Lahore, its emphasis would be shifted to the SMEs working in far-flung areas of the country.