According to the State Bank of Pakistan, small and medium sized enterprises comprise for more than 90% of the economic formations in Pakistan and also add a colossal 25% of the export incomes, 30% to the GDP and employ approximately 79% of the non-agricultural workforce. Hence, it wont be wrong if we say that Pakistan’s economy is led by these enterprises. However, still SMEs in Pakistan face a number of issues that strangle their progress and weaken the prospects of their further development in the country.
The importance of SMEs with respect to the industrial development of Pakistan is undeniable. In this regard, the role of the State Bank of Pakistan should be to facilitate the banks to make the lending procedure comfortable for the SMEs and provide them easy access to avail the financial services for developing their businesses. Despite being dynamic and diverse, the SME sector is quite vulnerable too and require immense support form the regulatory bodies like government and the State Bank to grow. Another supportive organization that addresses SMEs agendas to the government, investors and banks is SMEDA (small and medium enterprises development authority) which emphasizes on providing an empowering business setting and developmental services to small and medium sized enterprises. SMEDA is working diligently for the progress of SMEs in Pakistan.
The State Bank of Pakistan is also planning to facilitate SMEs by setting up a safe transaction registry in Pakistan, signifying that each and every loan granted with a collateral assurance is recorded. This will boost the communication and transparency between the banks.
Besides these, there are several other facilitation systems in the pipeline for SMEs which will expectantly form a culture change relating to the attitude of commercial banks and SMEs towards each other. However, undoubtedly the significance and standing of SMEs in Pakistan is downplayed, and so, educating about them, encouraging them and facilitating them in their struggles are some means of supporting them as well as the economy of Pakistan.