SME’s in Pakistan

Credit ManagmentPresented to Sir Tahir

SMEDA defines SME’s on the basis of Labor force and business worth

Micro 1 ----------10 employees Up to ------2m

Small 10---------35 employees2-------------20m

Medium 36---------99 employees20---------40m

Definition

Characteristics of SME’s Privately held small business (manage and work by its

own) large scale (proprietor and workers) No or few management lawyers Limited liability Independence in decision Scale of operation (limited market share) Few and unskilled labor Can easily adopt the changes (in developing market)

SME’s in Pakistan(small and medium enterprises)

3.2 million business units in Pakistan Over 99% business units employ less than 99 persons i.e. 3.16

million SMEs Work to reduce the unemployment and poverty in the economy Generate 78% of non-agri sector employment to labor force Direct Contribution to GDP over 40%, despite of financial and

other resources constraint Generate 25% of Manufacturing Export earnings contribute140bn to export The GOP statistics shows that SMEs sector recorded an

impressive growth of 14.7% during 1987/88 – 1996/97

SME’s in Pakistan

GOVT efforts toward SME’s◦ SMEDA (small and medium enterprise development

authority) Was established in October 1998 under the provision of

ministry of industries and production◦ The objectives of SMEDA is to;

Facilitation of Business Development Services to SMEs Formulate GOVT and fiscal Policies  to encourage the growth

of SMEs in the country Conducting sector studies and analysis for sector

development strategies Set up and manage a service provider’s database including

machinery and supplier for SMEs. Providing financial support to SME’s

E.g. Prime minister loan scheme Provide technical support

vocational tanning and seminars to make aware from local and international market

SME’s in Pakistan

Textile/Apparel Ginning Technology Up-Gradation Program Lending For Power Looms Computer Aided Design Centre (Common Facility Centre-Sialkot) Designing Institute for Garments (Peshawar) Accessories Sector StudyFisheries Program Lending Boat/Engine Modification, Gwadar District Establishment Of Shrimp Farms Fish Processing Facility In Gwadar (Feasibility Study)

Granite & Marble Export Warehouse Marble (Azakhel KPK) Establishment of Model Quarry and Training Institute Marble Joint Ventures and Technology Transfer Arrangements (KPK)

SMEDA

Formation of Punjab industrial corporation( PSIC)

Established in 1970 for promotion of small scale SME Small industrial board of KPK

Established in 1972 Directorate of industries in Balochistan

Established in 1976

GOVT efforts toward SME’s

Govt. & SME Interaction Taxation Finance Labor Legislation Human Resource Development Technology Market & Industry Information Lack of Infrastructure Environmental issues Social compliance issues

Barriers toward SME’s

Building a Conducive Environment Proposing and facilitating changes in Policy and Regulatory Environment Reducing the Cost of Doing BusinessFacilitating Government-SME Interface

Developing Sectors and Clusters Sector Studies, Strategies and ImplementationCluster Development Common Facility Centers (CFCs)

Provision and Facilitation of Services Investment Facilitation Technology, Training, Finance, Business Information, Marketing, and legal support Productivity and Competitiveness Improvement

Recommendations