KARACHI, Dec 23: Emphasis has been laid on adopting flexible collateral management system (CMS) for providing funds to small and medium enterprises (SMEs) exporters during their shipment phases to keep them competitive in the world market.
The issue was raised in a tripartite meeting organized by the Export Promotion Bureau (EPB) here on Monday, at its advisory centre between the representatives of State Bank of Pakistan (SBP), commercial banks and small and medium enterprises.
The meeting, presided over by director general of EPB, Rukhsana Shah, also took note of fast approaching WTO agenda on global free trade and its expected impact on SMEs of the country.
It was strongly felt that presently SME exporters face a lot of hardship in having access to finances at cheaper rates. The unsophisticated levels of financial intermediation available to the SME exporters, which includes commercial bank’s discounting facility provided by the Pakistan Export Finance Guarantee Agency (PEFG) also came up for discussion.
At the outset Rukhsana Shah said that SMEs have been neglected in the past but now every effort would be made to meet their requirements and the bureau is ever ready to assist, encourage and support the SMEs.
Director SPB Ishtiaq Ali pointed out that the exporters with annual turnover of $2.5 million can be called SMEs and suggested that SBP should be approached to form an SME cell.
Similarly, the representatives of SME bank and other banks — HBL, UBL, ABL, and First Finance Corporation (FFC)— promised to give the matter top priority and expressed their willingness to finance SMEs under pledge of goods and other banking system and agreed to adopt the CMS forthwith.
The president and convener Unisame, Mahmood Ghaffar and Zulfiqar Thaver reiterated that the SMEs play a vital role in the economic development process and focused on the looming threats the WTO charter poses for SME exporters.
Ghaffar stressed upon the need for a flexible collateral management system which should be exclusively designed to facilitate financing to SME exporters. He said that wider access to quality warehousing facilities at competitive rates is another avenue for boosting country’s export potential.
As a result of these deliberations it was decided that a committee be setup to specifically address the issues confronting the SME exporters and should submit its findings and possible solutions to the governor of the SBP.
The committee will be headed by DG EPB Rukhsana Shah with representation from SME exporters, SBP and SMEDA. Meanwhile, Zulfiqar Thaver and Mahmood Ghaffar of Unisame will represent their organization.