ISLAMABAD: Pakistan Stock Exchange (PSX) on Friday signed a memorandum of understanding (MoU) with Small and Medium Enterprise Development Authority (Smeda) and Islamabad Chamber of Commerce and Industry (ICCI) to increase small and medium access to equity finance.

Smeda General Manager Javed Iqbal Khattak, ICCI President Khalid Iqbal Malik and PSX Managing Director Nadeem Naqvi signed the agreement.

Mr Naqvi said a growing number of developing countries were creating specialised equity markets, differentiated from the main exchange, for the SMEs.

He said the PSX is also developing a specialised ‘SME Board’ for listing and trading of SME shares.

He said the platform would facilitate SMEs to raise interest-free capital to fund their growth and expansion needs.

“The bourse will also help SMEs in documentation matters to facilitate their listing on the stock exchange,” he added.

He said PSX provided 20 per cent annual return on investment in capital market and added that enterprises should take full benefit of these high returns for their growth.

ICCI President Khalid Iqbal Malik said urged the government to give five-year tax deferral to SMEs in the upcoming budget since they constitute nearly 90 per cent of all the enterprises in the country, employed 80pc of the non-agricultural labour force and contributed approximately 40pc to GDP.

“Due to strict lending criteria of banks and tough provisions of collateral, SMEs are facing many problems in promoting their business activities,” he deplored.

He said banks lending to small enterprises has come down by 7pc which should be a cause of concern for the policymakers.

Published in Dawn, April 29th, 2017