ISLAMABAD, Aug 15: The government on Wednesday formally launched the first-ever small and medium enterprises (SME) policy, to be implemented in a period of eight years (2007-15) with an initial estimated resource requirement of Rs13.128 billion.
The policy is expected to help develop SMEs through public-private partnership by creating maximum job opportunities for poverty reduction and propelling country’s exports, said Minister for Industries Production and Special Initiatives, Jahangir Khan Tareen after first meeting of the national committee on SMEs.
Speaking at a press conference, the minister said the policy aims to create globally competitive SMEs by creating a hassle-free business environment, ensuring provision of modern infrastructure support and institutional support structure for access to resources and services.
He was flanked by the governor of State Bank of Pakistan Dr Shamshad Akhtar, secretary of industries Shahab Khawaja and Chief Executive Officer (CEO) Shahid Rashid.
The SME policy for 2007 was approved, in principle, by Prime Minister Shaukat Aziz in May 2006 and was also approved by the federal cabinet in January this year and was notified in June 2007.
He expressed the hope that the SME policy would increase share of manufacturing small enterprises from 5.5 to 7pc, and decrease the threshold and density of regulations and thereby reducing the cost of doing business in the country.
The implementation initiatives include establishment of a credit guarantee agency for SMEs with a fund of Rs3,000 million, an SME subcontracting exchange at a cost of Rs26.09 million, an SME development institute by spending Rs115.66 million, an SME export house costing Rs156.89 million and creation of an SME promotion council with a fund of Rs143.72 million.
Whereas, a business support fund and an SME competitiveness support were already in operation as an initial phase of the SME policy implementation, he added.
Mr Tareen further stated that in order to ensure proper implementation of the SME policy, a permanent mechanism of monitoring had been developed in the form of national committee on SMEs, along with four provincial committees on SMEs.
An amount of Rs7.736 billion had been allocated for access to finances under the policy followed by Rs5 billion as access to resources and services—human resource development, technology market and industry information.
The minister said a report on SMEs, based upon findings of SME baseline survey which is in progress in 17 districts, would be submitted to the parliament.
The minister said that the government should take measures for promoting women entreprenureship, cluster development and also focus on neglected and untapped sectors of the economy. Mr Tareen said under the policy credit information centres were being established across the country for development of SME sector and also establishing a data development bank to facilitate the sector.
He said workshops in every city of the country would be organised to inform people about importance of SME sector for their own benefit and for betterment of the country.
Speaking on the occasion, Dr Shamshad Akhtar said there was no limit to private sector credit as opposed to the target- oriented credits to the sector in the 1970s. She added that banks were following prudential regulations for provision of loans to the SME sector.
She said that in the SBP, an SME consultative committee had been established to facilitate the SME sector which is represented by presidents of banks.
She added that credit enhancement to the SME sector would help reduce lending rates to the sector.