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Small and medium enterprises (SMEs) must grow

Small and medium enterprises (SMEs) must grow

Research revealed that industrialisation historically, has been a significant driver of economic growth and modernisation. It has retained its significance for developing states and states with economies in transition to the nowadays, offering them with the principal means to boost their factor productivity. This, in turn, offers the foundation for a long-term and sustainable raise in the standard of living and a corresponding fall in poverty.

It is also revealed that industrial development is also critically significant due to the support it offers to other sectors of the economy, for example through raising agricultural productivity and through the processing of agricultural goods. In addition, it also offers the base for the emergence of various firms providing high-tech services in support of manufacturing activities. No doubt, Small and Medium Enterprises (SMEs) is very important to the progress of the nation as it contributes considerably to the economic and social development any country in a myriad way: create career opportunities, foster human resource development and stimulate value addition to the economy.

SMEDA Over The Counter (OTC) Services
Sr. No. Initiatives July-March FY2022
1. SME Facilitation 4,314
2. Pre-feasibility Studies Development (New & Updated) 68
3. Investment Facilitation (RS million) 579.5
4. Business Plans 15
5. Training Programs 203
6. Theme Specific Helpdesks 74
7. Cluster / District Profiles (New and Updated), Diagnostic / Value Chain Studies 16
8. SMEDA Web Portal (Download Statistics) 366,995
9. SME Observer 1 Issue
10. SMEDA Newsletter 3 Issues

Despite the immense significance of a well-established SMEs sector, the Government of Pakistan needs to reprioritize and focus more on the development of SMEs to fully tap the potential and lead to economic advancement. It needs a comprehensive action plan and sustained attempts to attain a globally competitive sector that can revive the economy of Pakistan.

To support SMEs to play their due role in economic development, Ministry of Finance recorded that the Small and Medium Enterprises Development Authority (SMEDA) has taken many steps. The organization has an all-encompassing mandate of fostering growth of the SME sector by its portfolio of services including business development services, infrastructure development by organizing common facility centers, industry support for productivity enhancement and energy efficiency, human capital development by its training programs, and SME related projects with national and international development partners.

Country’s experts said that rapidly changing economic environment requires policy and institutional focus that can make SME sector of Pakistan competitive in international markets and complete the multiple agenda of employment creation, new enterprise development, increased exports, and enhanced contribution to Gross Domestic Product (GDP).

Ministry of Finance also said that the National Business Development Program for SMEs (NBDP) has been developed, for offering SME start-up support & business improvement by practical, on-ground services to SMEs. The project offers support in organizing new enterprises and building the capacity of existing enterprises through provision of business development services like; marketing, technology, incubation, research & development and organizational development services.

Statistics showed that the program envisages to facilitate 314,901 SMEs, over a period of 5-years. The Total cost of project is Rs 1,954.978 million out of which an allocation of Rs 400 million has been made for FY2022. Furthermore, SMEDA’s largest capacity building initiative comprising of 3,800 training programs during 5 years in the whole country including Federal Capital, AJK & GB has also been launched under NBDP.

Over 180 theme & sector-specific training programs had been conducted with over 7,400 SME’s participants. In addition, demand-based training and on-premises training programs for SMEs are also executed at their business locations. Certification Program for the capacity building of Individual Business Development Service Provider (IBDSPs) through offering subsidy to cover up to the 80 percent of the program cost per IBDSP has also been initiated during the period.

It is also recorded that SMEDA is executing PSDP project sponsored through the Ministry of Commerce and Textile to boost value addition in the field of textile garments through organizing industrial stitching units in Pakistan. Financial assistance through Matching Grants is offered for organizing “Industrial Stitching Units (ISUs)”. Under this project, 60 percent of grant in the form of machinery is financed through the project and 40 percent cost is borne by the owner/entrepreneur of the stitching unit. Statistics also showed that the total cost of project is Rs 350.54 million out of which Rs 100 million assigned for FY2022.

The target for the Fiscal Year 2022 was to establish 50 ISUs. Grants application cycle has already been launched. Out of the total target of establishing 50 ISUs, 20 ISUs fruitfully organized till 31st March, 2022 and the remaining ISUs are under process for completion. To develop clusters by establishing Common Facility Centers (CFCs), SMEDA and UNDP are jointly implementing Small Business Interventions Project. During the period, 4 and 3 CFCs were established at Khyber Pakhtunkhwa and Sindh respectively.

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