Small and Medium Enterprise Development Authority (Smeda) has initiated a consultative process with stakeholders on the first-ever SME policy to be announced by the government by next June. Shahab Khawaja, Smeda Chief Executive Officer, disclosed this while addressing a press conference here on Tuesday. Sultan Tiwana, GM Business Development Services, Iqbal Kidwai, GM Outreach Program, Anjum Ahmad, Director Special Projects also accompanied him.
Shahab further disclosed that implementation, monitoring, mediation and arbitration in recovery clauses would also be part of the policy, while the government would be asked to act as guarantor of credits extended against personal guarantees to SME instead of existing collateral base system.
According to him, the government was making special endeavours to curb poverty and generate more employment opportunities in the country for which it was relying upon the SME sector.
There were approximately 3.2 million business enterprises in Pakistan, employing up to 99 persons each, he said, adding that such enterprises constitute over 95 percent of all private enterprises in the industrial sector and employ nearly 78 percent of the non-agriculture labour force. Small and medium enterprises of this sort contribute over 30 percent to the GDP, Rs 140 billion to exports, and account 25 percent of exports of manufactured goods, besides sharing 35 percent in manufacturing value added.
He regretted that in Pakistan, the SME sector had not been able to realise its full potential. "The SMEs continue to suffer from a number of weaknesses, which hamper their ability to take full advantage of opening of economy and the increasingly accessible world markets. The areas of constraints are normally identified as labour, taxation, trade capacity, finance and credit availability," he added.
In order to enable the SME Task Force work effectively, four Working Committees were setup to carry out technical analyses and deliberate the findings on the issues like business environment, access to finance, access to resources and services, SME definition, feedback, monitoring and evaluation mechanism, he added.
Khawaja Shahab said, "Working Committees after due deliberation, have finalised their recommendations in each of the areas cited above. However, to achieve a national ownership of these recommendations a wide scale consultation with the Provinces is being undertaken to elicit views of the ultimate beneficiaries, ie SMEs."
He described that the first provincial consultative workshop was held at Karachi last Saturday. The same sort of workshop was being held at Lahore on January 19, which would be followed by workshops at Quetta and Peshawar on January 29 and February 9, respectively.
He said that the recommendations of the provinces would be summed up at a national workshop to be held at Islamabad in March next that would help transform the recommendations into draft policy on SME. "The draft would be submitted by Jehangir Khan Tareen, Federal Minister for Industries, Production and Special Initiatives, to the Federal Cabinet in April, 2005. The SME Policy would be announced by the government by June this year," he added.
To a question he said that they would also propose a law on SME and an ombudsman, which would help in strengthening SME in the country.
Moreover, there was need for business counselling in the private sector that help SMEs in business planning, he added.
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