ISLAMABAD: Adviser to the Prime Minister on Commerce, Textile, Industry and Investment Abdul Razak Dawood said on Sunday that the government was finalising a scheme to support small and medium enterprises (SMEs) across all sectors.

“It is our endeavour to help small businesses as compared to larger ones because of their weaker financial position,” Mr Dawood said in a Twitter posting.

Adviser to the PM on Finance Dr Abdul Hafeez Shaikh has already said that Rs100 billion had been allocated for supporting SMEs and the agriculture sector as part of the government’s relief package of Rs1.2 trillion to deal with the impact of Covid-19 on economy.

Salient features of the plan would include concessional loans to SMEs and the agriculture sector. SMEs, industry and agriculture will see deferment of loans — both principal and interest. The government will also provide risk guarantee to banks for fresh loans to SMEs, according to a tweet by Minister for Industries and Production Hammad Azhar.

SMEs, being one of the largest and the most important sectors of economy, play a key role in shaping national growth strategies, employment generation and social cohesion by improving standard of living of vulnerable segments of society. In most countries, SMEs constitute more than 90 per cent of all enterprises and significantly contribute towards inclusive economic growth.

There has been concern that in Pakistan the SME sector has not been able to realise its full potential. The SMEs continue to suffer from a number of weaknesses, which hamper their ability to take full advantage of the opening of economy and the increasingly accessible world markets. The areas of constraints are normally identified as labour, taxation, trade capacity, finance and credit availability, says a document of the Small and Medium Enterprises Development Authority.

Published in Dawn, April 20th, 2020