Karachi, April 07, 2015 (PPI-OT): The Union of Small and Medium Enterprises (UNISAME) has urged the government to end red tapism and put SME promotion and development on fast track and facilitate the sector with access to finance, technology, marketing support, environment and incentives to enable it to meet the global challenges.
Zulfikar Thaver president UNISAME invited the attention of the government to the World Bank report on making doing business easy in Pakistan and urged the government to take positive steps to ensure that the SME promotion and development is on fast track and take decisions to facilitate the sector in all respects.
Thaver said since the micro and small enterprises are in the majority and are devoid of access to finance it is very important that finance is provided to them. The micro finance banks must be allowed to finance the micro and small sector up to rupees one million and all caps and restrictions must be removed to enable the micro and small sector to obtain finance up to rupees one million from the micro finance banks.
He said the commercial banks are financing the medium sector but not the small sector which is in the majority. It is therefore important that the micro finance banks are permitted to finance the micro and small enterprises up to rupees one million.
He said over a period of time many home based and cottage industries employing less than 20 workers have done fairly well and could do better if they have access to finance but the prevailing restrictions of meager limits of rupees five hundred thousand that to with many restrictions is proving insufficient for growth oriented entrepreneurs and they cannot plan to increase their businesses.
Secondly he urged the government to educate the micro and small entrepreneurs to modernize in each and every aspect of their businesses in terms of technology and it s the requirement of time that the technological gap is filled.
Thirdly he said that despite our repeated demands for marketing support for the small sector the government has not taken any concrete step. He lamented that several years back the Trade Development Authority of Pakistan (TDAP) had taken the initiative to establish an export house for the wares of the SMEs and had set up a steering committee for the purpose but has not moved in the direction.
Fourthly there are no incentives for new comers or those entrepreneurs who are aspiring to put up industries in agro based commodities value addition projects. Fifthly the union’s request for the SME Liaison Committee (SME-LC) remains unanswered although the government had allowed the union to set up a Rahnuma Committee on the pattern of Khidmat Committee but the union preferred to have a proper liaison committee.
The reconstitution of the board of directors of the Small and Medium Enterprises Development Authority (SMEDA) with one representative from each province as per SMEDA ordinance is not complied with. It is also incumbent to include a representative of the SME union on the board of directors of SMEDA, PCSIR, SME Bank, Engineering Development Board (EDB) and National Productivity Organization (NPO).
Many SME units have closed down in the rice sector due to hurdles created by the Quality Review Committee (QRC) which is meaningless and has failed to protect the basmati rice for which it was established. In fact it is allowing the big rice exporters to export non basmati rice as basmati but the SMEs are not permitted and not enjoying level playing field. The ministry of commerce decided to close the QRC and even informed the TDAP but the matter is pending action.
Many units importing shredded tires are closed due to hurdles created by the environment ministries. Even in this case the no objection certificate (NOC) is given to the resourceful and influential. There is no tariff protection for several local SME industries and they have to face tough competition from imported goods being dumped into the markets.
Ship loads of non essential items are imported by undisclosed money and there is no check on imports. Even cakes, biscuits, confectionery, stationery, clothing, appliances and items made in Pakistan are imported and as such the SMEs are the worst hit. The government does not care and is busy in politics all the time. It is important that the commerce, finance and industry ministries remain focused and devote full time to economic issues.
The government needs to seriously remove all hurdles and create business friendly environment by not only facilitating but supporting, encouraging and motivating the SME sector to come forward and set up industries in the outskirts of the urban areas and rural areas. The SMEs expect business reforms from the Pakistan Muslim League Nawaz (PML-N) business friendly government and the PML-N government should not disappoint the SMEs who are in the majority and enjoy a very strong vote bank.
For more information, contact:
Union of Small and Medium Enterprises (UNISAME)
75/1 3rd Commercial Street,
Phase IV, D.H.A., Karachi, Pakistan
Cell: +92-300-8245307, +92-321-8245307