President Sialkot Chamber of Commerce and Industry (SCCI) Dr Khurram Anwar Khawaja has said that small and medium enterprises (SMEs) sector was playing an instrumental role in generating industrial employment and contributing to the GDP in country.
Talking to media persons on Tuesday here, he added that according to an estimate small and medium enterprises form 90 percent of businesses in the country, comprising heterogeneous activities with active presence in services and manufacturing sector.
These represent a significant component of Pakistan's economy in terms of value-addition by providing 80 percent of industrial employment and contributing 30 percent to the GDP, he revealed. Khurram said that its contribution to value-addition in the manufacturing sector has risen significantly, meaning huge productivity improvements in the last two decades besides SMEs provide employment at lesser cost and its capital requirement is also low.
The advantage of promoting small scale manufacturing facilities on fast track basis in developing countries like Pakistan cannot be ignored if seen in the context of paucity of capital and know-how for the rapid industrialisation in large-scale sector, he said.
The SCCI president further stated that the policies of the government regarding industrialisation have largely been devoted to financing of large scale industries through credit lines from the international financial institutions while attention was not focused through financing for a well-planned promotion of small scale industries in the country.
Khurram was of the opinion that it was the credit of domestic cottage industry that despite its unorganised status in the Pakistan, this sector has maintained a well-sustained growth rate. In Sialkot, the success of SMEs is only due to the business acumen and determination of the entrepreneurs, supported by skills of artisans and support of the government is not much significant in the success story, he pointed out.
The SCCI president said that the desired pace of growth of SMEs has failed as small scale industry is mainly hampered by non-availability of credit facility, commercial banks are reluctant to offer loans to SMEs. Where loans are available, the SMEs find it difficult to get the loan due to requirement of collateral and securities, high production cost due to high rates of electricity and other utility services and lack of support in technology upgradation and making a regulatory environment that is conducive for their creation and growth.
Khurram suggested that government should adopt effective measures to enhance the capability of SMEs, announce special incentives and package for SME sector, help the SMEs to tap opportunities through increase market and resource access in order to maintain competitiveness in friendly dynamic global market economy and carefully designed polices needed to encourage the development of SMEs.
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