Road map given to PM for promotion of SMEs & stimulation of economy

SMEs need facilities to meet global challenges
KARACHI, Union of Small and Medium Enterprises (UNISAME) has submitted road map to Prime Minister Nawaz Sharif of Pakistan being convinced of the PM’s best wishes for the less privileged sector and his desire to brighten the prospects of SME promotion and development on fast track basis and stimulate the economy. The PM Youth Loan Scheme (PM-YLS) has won the hearts of the youth and has proved his dedication for promoting entrepreneurship.

President UNISAME Zulfikar Thaver submitted that there are 3.5 millions SMEs and they comprise 96% of the business community, they contribute 35% to exports and 40% to exports. They are the backbone of the economy, the engine of growth and the vehicle for employment.

He said SME promotion and development is no charity and it is the right of the SMEs and the responsibility of the state to facilitate, motivate, support and encourage them to grow. The government has to ensure that all information relating to their trade is provided to them and they are encouraged to modernize their units.

UNISAME has submitted that the SMEs need the following facilities to enable them remain competitive and meet the global challenges and grow.

The price of land has increased tremendously and SMEs cannot afford to buy land at costly rates. The government should provide land to prospective investors in areas where ample land is lying idle and can be put to good use. It is important that easy payment terms are also given to the investors so they can repay the cost of the land by deferred payment scheme. Industrial Zones and Industrial Estates are urgently required for rapid promotion.

Finance at affordable mark up: Commercial banks and development financial institutions are providing finance to the SMEs but are insisting on collateral and charging high mark up. They should finance SMEs on affordable mark up and on the basis of the cash flows of the enterprise as per the prudential regulations of the State Bank of Pakistan and they should also abide by the SBP regulations of financing the SMEs to the extent outlined by the SBP.

Education &Technical know how : The government should arrange for technical know how in Textiles, Engineering, Chemicals, Synthetics, Agro-based industries on a permanent basis for product improvement, up gradation, cost reduction and productivity. These programmes should be
organized by The National Productivity Organization (NPO) on a country wide basis. The Small & Medium Enterprises Development Authority (SMEDA), The Pakistan Council of Scientific & Industrial Research (PCSIR) and the SME Associations, The trade bodies and the community organizations can play very important roles.

Establishment of SME Chamber, Bureau & Institute: The establishment of the chamber, bureau and the institute is very essential and it is very important that these institutions must be established for the promotion and the development of the sector and the government must take immediate steps for the establishments of these organizations with branches all over the country.

Tax relief: The government should give tax relief to new industries and reduce the tax on SME units. Uninterruptedsupply of raw materials. The government must ensure uninterrupted supply of basic raw materials such as plastic granules, iron & steel, cotton yarn and fabric and chemicals for the major industries.

In addition to the above UNISAME has requested the government to set up the office of the SME Ombudsman and exempt SMEs from laws which hamper the functioning of the SME units and take up much of their time and energy.

There is lack of co-ordination amongst the various agencies working for the promotion & development of the sector

The importance of logistics has been established and the government must make endeavors to stress the need for chain supply management and organize systems for the management of men, money, material and time for the success of the business ventures in Pakistan. We have proposed the setting up of the Institute of Materials Management and have extended and offered full co-operation to the government.

SME representatives must be taken on the board of SME BANK, SME Leasing, TDAP, PCSIR, Nationalized Banks and Development Financial Institutions.

Thaver who is member board of directors of SMEDA said the above road map has been endorsed by the experts and its implementation would give handsome results. He said UNISAME has sent a copy of the road map to Ghulam Murtuza Jatoi federal minister industries and production and chairman SMEDA to enable him to impress upon the cabinet the requirements of the majority sector.

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