KARACHI, Aug 15: Leaders of small and medium enterprises want representation of the SME Bank on the board of Small and Medium Enterprises Development Authority (Smeda).

By and large, the Smeda Ordinance 2002 promulgated on Wednesday has been appreciated. The 12-member board draws six government members and six from the SMEs, but no representation has been given to the SME Bank.

Union of Small and Medium Enterprises (UNISAME) convener Zulfikar Thaver welcoming the new authority said it would now have a wider radius and prove useful to the cause of SMEs.

However, he asked the government to arrange quick and cheap finances for SMEs if the required goal has to be achieved. “There is an urgent need for an SME fund because of the fact that the SME Bank is not functioning like an SME bank. It is just like any other commercial bank and is lending at the same rate as scheduled banks lend, so there was no benefit to the SMEs who can ill-afford to pay 17 per cent mark-up,” he maintained.

An SME fund created by the government, he said, would earmark an amount for the SME cause, and entrepreneurs could borrow at substantially lower rates and accomplish their targets due to low cost of finance.

Another flaw in the ordinance of the new authority is that it has not empowered Smeda to create fund from foreign donors which is easily available at lower rates and some times even at zero rate, the leaders of SMEs asserted.