“Industry Support Cell of Small and Medium Enterprises Development Authority (Smeda) has helped around 495 SME units through foreign consultants especially arrived through Japan International Cooperation Agency (JICA). Out of 495, over 331 units were helped in productivity improvement, 148 were made energy efficiency and 16 were enriched with green productivity.”
Smeda Chief Executive Officer Muhammad Alamghir Chaudhry revealed this while talking to the members of the Lahore Economic Journalists Association. While identifying weak areas in the SME growth, he said that four major impediments are hindering the growth of SMEs in Pakistan (limited access to finance, low based technology, less access to market and non conducive policy and regulations).
SME sector is a proven engine of growth for employments. Countries like Japan, Singapore, Korea, China and Malaysia are the known success stories of alleviating poverty through SME development, he revealed. He said SME sector is also backbone of economy in Pakistan with 3.2 million SMEs in the formal sector and presence of innumerable SMEs in the informal sector.
According to the Securities and Exchange Commission of Pakistan’s record 96 percent of the registered companies are of the sole proprietorship category, which also shows that majority of the business concerns in Pakistan are SMEs. As per available data, 65 percent of the total SMEs in Pakistan are situated in Punjab, 18 percent in Sindh, 14 percent in Khyber Pakhtunkhawa, two percent in Balochistan and 0.6 percent in Islamabad.
“SMEs have over 40 percent share in our $240 billion GDP. The cost of job creation in SME is very low being Rs 70000 per job in a garment unit of about 200 workers while in large scale spinning unit it is about Rs 1.1 million,” he added. He said SMEs grow at an average rate of eight percent as compared to the large industry, whose growth rate is five percent per annum. Smeda has chalked out a plan to generate 10 million new jobs by establishing 270,000 new SMEs. It will increase the GDP by about US 120 billion dollars in GDP, he claimed.
He said in Khyber Pakhtunkhawa about US 830 million dollars have been disbursed so far among 1,052 local SMEs for rehabilitation, up-gradation and business development services. The project also created employments for 2,500 workers. The multi donor fund for this purpose is jointly managed by Smeda and the World Bank. The prominent projects funded by Smeda from its PSDP include Agro-Food Processing Facility, Multan, Mechanized Football Unit, Sialkot, Red Chili Processing Centre, Kunri, Sindh, Light Engineering Centre, Mardan and Chromites Beneficiation Plant, Khanozai. At the conclusion of workshop certificates were given to the participating journalists.