KARACHI, Oct 6: The Union of Small and Medium Enterprises (Unisame) has proposed to the ministry of finance to introduce and promote venture capital companies (VCC) aimed at meeting financial needs of small and medium enterprises (SMEs)

The union has also suggested a legislation to protect VCCs, making them effective for the economic prosperity of the SMEs and the country as a whole.

Since commercial banks and development finance institutions (DFIs) have their reservation and are not willing to finance SMEs the creation of VCC would provide alternative source to make sufficient funds available for the SMEs.

In a presentation to the ministry of finance the convener of the Unisame, Zulfikar Thaver has said that foreign VCCs have shown interest in coming to Pakistan and have also allocated funds for this purpose.

He said that these VCCs found Pakistan a lucrative market and were prepared to find avenues for promotion of ventures but seeking legal cover.

Thaver said that Venture Capital Industry is in vogue in Canada, the US, Australia and UK and the capitalist provide venture funds to entrepreneurs to enter into projects and participate in the venture as partners and get higher returns. They also provide expertise on the business.

The VCCs keep a close watch and are monitoring and supervising their partners and have a say in the management.

Many SMEs in the country have ideas and technical knowledge of the production but have no funds and in such situations VCCs play their role.

Engineering industry, construction and housing industry, he said can be promoted to a great extent and also agricultural farms can be financed by VCCs.