KARACHI, Sept 26: The Asian Development Bank (ADB) will set up a sector development fund of $100 to $300 million for Small and Medium Enterprises (SMEs). The fund will be used for uplift, betterment and promotion and progress of the SMEs.

This was stated on Thursday by senior consultant of ADB Bruce Harris in a meeting held with Small & Medium Enterprises Development Authority (SMEDA) and office-bearers of Union of Small & Medium Enterprises (UNISAME).

The Asian Development Bank is conducting a study of SME sector in collaboration with SMEDA. The survey is aimed at exploring the SME environment in the country and the type of business development services available to them.

The study will be aimed at identifying the types of supper and services available to SMEDA, identification of any impediments and their possible solution.

Prior to making available sector development fund of up to $300 million the ADB will carry out this study, Project Preparatory Technical Assistance (PPTA), which is divided into three phases. It will include diagnostic phase, the design and pilot testing phase and would take around nine months period for completion.

The ADB has fielded a team of international as well as domestic consultants to carry out the PPTA. The outcome of the PPTA will lead to a Sector Development Programme (SDP) for the SMEs, which will be in place by middle of next year.

Bruce Harris made his stance clear by stating that ADB would like to support the entire SME sector and not any specific sector or cluster of association because all the SMEs need support to uplift their businesses through capacity building and other services.

Speaking on the occasion the chairman UNISAME Mehmood Ghaffar highlighted the problems confronting the SMEs such as high mark up rate, lack of technical know-how and high cost of utilities.

The convener UNISAME, Zulfikar Thaver pointed out that there is an urgent need for an SME fund and they need quick and inexpensive finance on easy terms. He said that the need for industrial zone with complete infrastructure is the urgent requirement.

The SMEs also need leasing facility of commercial industrial property, besides machinery and equipment, he added. Zulfikar emphasized the need for collateral management facilities and the establishment of warehousing facilities based on collective and joint sharing basis.