Govt focus demanded to problems of small, medium enterprises

Karachi: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of Ghulam Murtuza Jatoi, the federal minister for industries and production (MoI&P) to the urgent needs of the SME sector under his ministry and urged him not to shy and to take up the issues with the prime minister Mian Mohammad Nawaz Sharif.

President UNISAME Zulfikar Thaver said with the reduction in discount rate and lowered fuel prices it is the best opportunity for the sector to gain strength and grow but unless the issues of energy supplies like electricity, gas and now irregular supply of petrol and also law and order are taken care of the sector will not be able to benefit.

He also stressed the need for access to finance for the sector and expressed concern that although the State Bank of Pakistan (SBP) has been reducing the discount rate, the commercial banks are not reducing the lending rates proportionately and secondly their finance ratio to the SME sector is questionable.

Thaver urged the federal industries minister to emphasize in the cabinet the need for SME financing through better risk management under modern systems of collateral and warehouse receipt financing.  There is urgent need for ‘pay as you earn scheme’, hire purchase, commercial property mortgage financing.

The union has called upon the government to facilitate the sector to modernize their units, most of the SME units need balancing, modernization and replacement and the government must facilitate them with project and bridge financing.

The union also invited the attention of the ministry to the lack of support for the agricultural produce value addition units and complained that the agro-based industries are suffering due to lack of support.

UNISAME submitted that the SME sector is deprived of the attention it deserves.  Their requirements of land at concession and easy payment facilities, 0 duty on import of plant, machinery, packing materials, 0 duty on all energy generating devices and equipments, tax exemptions for new units, innovative products and import substitution industries is not under consideration although these issues deserve top priority.

The Small and Medium Enterprises Development Authority (SMEDA) is without a full time chief executive officer (CEO) and the board of directors (BOD) has not been reconstituted as per the SMEDA ordinance to include one representative of each province. For the vibrant and vigorous working of SMEDA it is very important for the authority to have a CEO and experienced experts on the BOD.

SMEDA also needs adequate funds for its projects and professionals to carry out result oriented work of SME promotion and development and the federal minister as the chairman of SMEDA needs to advocate the cause of the institution and not let it remain as an ineffective body anymore.

It is pertinent to note that SMEDA was conceived by the PM Mian Nawaz Sharif  during his earlier term and had an agenda for real SME promotion and development on modern lines but unfortunately has been reduced to a mere consultative body.

The scope of SMEDA needs to be widened to enable it to reach the SMEs all over the country. The provincial governments could also benefit from SMEDA and should work jointly with the authority to promote the SME units.

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