ISLAMABAD, June 27: Industries and Production Minister Liaquat Ali Khan Jatoi on Friday expressed dissatisfaction over the performance of Smeda and criticized SME Bank for charging high interest rates.

Presiding over a meeting of Small and Medium Enterprises Development Authority (Smeda), he said that commercial and investment banks like Pak-Kuwait, Pak-Oman, National Bank of Pakistan and others should be approached because they were ready to offer loans for SMEs on lower interest rates. A group of economic reporters were also invited to observe the presentation.

He said commercial banks were sitting on heavy liquidity and their loans were available at 6-7 per cent, which is preferable instead of going again and again to SME Bank, which was providing loans at 11-12 per cent mark-up.

He expressed his anger over procedural and unnecessary delays and inquired as to why his directives issued three months back about mark-up issue, preparation of feasibility studies and implementation of schemes were not implemented.

Mr Jatoi said he was no more interested in stories, theories and presentations and wanted to know what practical results had been achieved by Smeda over the last couple of years. He was unhappy when told by a senior joint secretary that the board of directors of Smeda was recently told by a foreign consultant that only 6-7 per cent businessmen were familiar with Smeda.

He directed Smeda to devise its future strategies in a view to produce tangible results in the development of small and medium sector in the country. He said the government attached high priority to the SME sector due to its significance in creating new employment opportunities.

He pointed out that small cities near rural areas were in dire need of Smeda’s assistance for creating an entrepreneurial culture and asked Smeda to extend its support services along with the training programmes to such business clusters.

The minister also approved a plan to open up 18 new regional business centres in various cities of all the four provinces, but directed that these should be started after investigation about their utility.

These regional centres include Sukkur, Hyderabad, Nawabshah, Dadu, Peshawar, Charsadda, Mingora, Abbotabad, D.I. Khan, Gwadar, Quetta, Khuzdar, Loralai, Dera Murad Jamali, Faisalabad, Multan, Rawalpindi and Rahim Yar Khan.

The minister approved a summary to host the 3rd meeting of OIC task force on SMEs and SME investment conference in Pakistan in 2004 under the aegis of Islamic Chamber of Commerce and Industry.

He also directed to initiate a study of sick units in the country to find out reasons of their closure, which should be completed within three months.

The minister said there would be no compromise on performance, and the tasks assigned to the Smeda should be completed timely and he would review its progress every month.

He also asked Smeda to revamp its board of directors with maximum representation of the private sector. He also directed to set up a task force of Smeda for Balochistan to implement the identified projects and submit its progress report on weekly basis.

Mr Jatoi said that Smeda should play a pivotal role in accelerating the investment activities in the country by identifying new value added sectors like dates and apple processing, knitwear manufacturing, ceramics, wooden furniture, etc.

He stressed on translating all pre-feasibilities and other information documents produced by Smeda into Urdu so as to make them useful for the local small entrepreneurs.

He said small and medium entrepreneurs were the best source of generating low cost employment. And the importance of this cannot be overemphasized because SMEs constitute almost 90 per cent of all the enterprises in Pakistan; employ 80 per cent of the non-agricultural labour force; and their share in the annual GDP is nearly 40 per cent.

The meeting was told that more than 8,000 SMEs would be facilitated through the Smeda helpdesk facilities operating in nine cities and in addition, over 100 business plans would be developed for SME investment projects during the next financial year.

Later, a book prepared by Smeda, “How to approach banks” was also launched by the minister. He urged Smeda to compile more publications and guides for small investors.