The Sindh government is working on various initiatives to help promote the small and medium-sized enterprises (SMEs) and cottage industry in the province to create jobs. SMEs contribute 40% to GDP of Pakistan and 25% in overall exports. After the agriculture sector, the SME sector provides employment to the highest percentage of working population in the country. The SME sector contributes 78% of non-agriculture sector employment. “Supporting SMEs is taking long stride towards inclusive development. We provided Rs400 million to Sindh Small Industries Corporation in 2022-23 and Rs400 million for 2023-24 to ensure a permanent and sustainable solution as suggested in USAID’s ‘Diagnostic Study for Restructuring of Sindh Small Industries Corporation’,” said Ubaid Mazari, Director General of Industrial Promotion Cell in the Sindh Industries Department.

He said that budget estimates for 2023-24 had been kept at Rs1.8 billion against budgeted amount of Rs1.6 billion last year. “It includes Rs60 million allocated for implementation, coordination, programming and monitoring of SME Competitiveness Strategy for FY24.” He said that Rs500 million had also been allocated for development and promotion of SMEs and cottage industry in both rural and urban areas under pro-poor grants portfolio. Mazari said that SMEs assisted in regional and local development as they helped accelerate industrialisation in rural areas by linking with the more organised urban sector and achieve fair and equitable distribution of wealth by regional dispersion of economic activities. Both the government and the State Bank of Pakistan have been trying to develop the SME sector in Pakistan. In this regard, the government has restructured key support institutions such as Small and Medium Enterprise Development Authority (SMEDA) and SME Bank.

However, Mazari pointed out that problems of small businesses differed from those of medium-sized enterprises. He added that small businesses had a big problem accessing finance. “Access to finance usually means access to bank finance, because SMEs are usually too small to access bond and equity markets. Access to finance is one of the most significant challenges for the creation, survival and growth of SMEs.” He said that the Sindh government had incorporated this issue in its policy to promote the SME sector by helping small and medium entrepreneurs to get easy and cheap credit from the banking sector, which has been largely doling out funds to the big industries.

Credit: Independent News Pakistan (INP)