SMEDA urged to align its definition of SMEs with proposed SBP definition

KARACHI: The Union of Small and Medium Enterprises (UNISAME has stressed the need for a uniform definition of SMEs and urged the Small and Medium Enterprises Development Authority (SMEDA) to align its definition of the SMEs with the proposed State Bank of Pakistan (SBP) definition which is pragmatic.

President UNISAME Zulfikar Thaver said as chairman of the definition committee of the National Committee of SMEs (NCSMEs) and after consensus of all stakeholders it was resolved by him and the committee to have the employment size upto 250, paid up capital as 25 millions and annual sales upto Rs 250 millions as parameters for the definition of an SME in the SME policy 2007. It is almost 15 years that the stakeholders are deliberating on the definition and no uniform definition which is acceptable to all has been adopted.

However the need is felt to revise the definitions of the small and medium enterprises individually and also the need to define them separately to focus on each and make policies to suit and meet the requirements of each separately. The need for a revised definition is felt more due to the value of the rupee and its buying power.

Thaver said that the SBP has proposed revision of the definitions of small and medium separately and has proposed revision for small enterprise as having upto 20 employees and an annual sales turnover of Rs 100 millions.

For medium enterprise it has been proposed to revise the definition on the parameters that it is an entity ideally not a public limited company and the number of employees upto 250 and an annual sales turnover of above Rs 100 millions upto Rs 800 millions.

Thaver said SMEDA has called a consultative session on 24th February 2016 at its head office in Lahore to review the SME definition as provided in the SME policy 2007 and the proposed revised definitions of the small and medium enterprises and it is hoped that consensus will be developed for a uniform definition for each the small and the medium.

The Union chief on behalf of himself and the SME Council of UNISAME called upon the government to adopt the KOSGEB Turkish model for SMEDA to make it meaningful, effective and far reaching.

Secondly he emphasized that until and unless the high impact actions are not taken for the sector like the SME specific bank, the credit guarantee insurance, leasing for commercial property, export house/gallery for marketing support the sector will not get the support it deserves.

He sated that merely defining the SMEs will not serve any purpose and the real SME promotion and development can only be achieved by facilitating, supporting, encouraging and motivating the sector for growth and modernization.