Saving SMEs

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SMEs play a key role in the economic development of any country, but these businesses in Pakistan were facing multiple problems due to lack of supportive policies. SMEs are the backbone of our economy as they constituted over 90 percent of all enterprises in Pakistan, contributed 40 percent to GDP growth, employed 80 percent of the non-agricultural labor force and were a major source of exports.
However, it is unfortunate that these businesses were not getting due attention of the government despite the fact that the SME sector was an important pillar of the economy and needed priority focus for development and growth. Therefore, now the government must take measures for early finalization of SME Policy 2019 to create a conducive environment for better growth of SMEs.
SMEDA has been working for the last many months on SME Policy 2019, but still, the policy could not be finalized. The government in consultation with all stakeholders must immediately finalize and announce new SME policy as the last SME policy developed in 2007 could not contribute effectively in promoting SMEs in the country. Lack of easy access to finance was the major hurdle for SMEs due to which share of SMEs in total private sector credit was just around 6-8 percent. New SME policy should ensure easy access to credit for SMEs so that these businesses could grow up to their real potential and play an effective role in the economic development of the country.
The economy of Pakistan is passing through a critical phase as the exports were not growing up to potential and trade deficit was rising. If provided with an enabling environment, SMEs could drive Pakistan out of current economic challenges and put it on the path of sustainable growth.
SMEs led growth would bring multiple benefits to the economy as it would attract new investment, create more jobs, reduce poverty, improve tax revenue, promote exports and enhance forex reserves of the country. Therefore, the government to announce a new SME Policy on priority basis to pave way for better growth of this important sector.

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