PM urged to ensure SME policy covers all aspects of SME promotion and development

The Financial Daily 02/03/2020
KARACHI: The Union of Small and Medium Enterprises (UNISAME) has invited the kind attention of the prime minister (PM) Imran Khan to the SME policy 2020 sent to the cabinet for approval and has urged him to make sure it is comprehensive and is inclusive of all aspects of SME promotion and development, says a Press release.
President UNISAME Zulfikar Thaver said it is believed and reported that the document has omitted some important aspects and requirements of the sector as per global models of countries who have done outstanding work for their SMEs.
Since the policy is under approval and very important and crucial requirements have to be included such as that the Small and Medium Enterprises Development Authority (SMEDA) needs to be placed directly under the PM and not the adviser or the minister. Secondly the sector needs an SME ombudsman like other ombudsman of banking, insurance, tax and others.
Thirdly there is need of a specific SME development fund with sufficient portfolio.
Fourthly a global SME export promotion bureau is very necessary.
Fifthly the SME specific bank needs to be provided a portfolio and profile for dedicated SME uplift.
Other important points are that the SME farmers cannot be ignored and have to be included in the fold of SMEDA as they are also doing income generation and belong to the primary sector of supplying raw material in the supply chain. In fact a value addition bureau is needed in the secondary sector.
There are many SMEs who due to their hard work have outgrown the SME definition parameters and are considered success stories. They need to expand and grow further and need special facilities to set up import substitution industries but because they do not fit in the SME definition parameters they need to be considered as a special category created for them.
It is believed that the new definition defines the medium Enterprises as those whose turnover is up to rupees 600 million instead of Rs 800 million as per State Bank of Pakistan’s (SBP) definition. This means those medium enterprises who were considered as SME’s will not be SMEs. This is shortsightedness because considering the depreciation of the rupee the figure of Rs 800 million should have been increased and not reduced.
It is very important to see things in a broader perspective as it is the upper medium entrepreneurs who are ready to set up industries as the big industrialist are shy at the moment. The policy makers argument that the broad definition will deprive the real SMEs is perhaps valid but the SBP is in a position to ensure that the commercial banks cater to the needs of all the segments diligently under the National Finance Inclusion Strategy (NFIS). UNISAME experts are really concerned and earnestly request the policy makers to accommodate the upper medium segment.
Thaver as member of advisory committee had pleaded that the turnover for inclusion of the medium sector should be increased to Rs one billion on the basis of the rupee depreciation. However UNISAME will now plead for a separate category for those excluded by virtue of the new definition.

Posted in: Press Releases