Small and Medium Enterprises Development Authority has called a consultative session on 19th April to review SME definition
Karachi, April 17, 2016 (PPI-OT): The Small and Medium Enterprises Development Authority (SMEDA) has called a consultative session on 19th April, 2016 at its head office in Lahore to review the SME definition as provided in the SME policy 2007 and the proposed revised definitions of the small and medium enterprises and it is hoped that consensus will be developed for a uniform definition for each the small and the medium.
The Union of Small and Medium Enterprises (UNISAME) has reported that all SME stakeholders are keen for a uniform definition of SMEs and to categorize, the small and medium separately to focus on the needs and requirements of the small and medium separately and promote and develop the micro, the small and the medium enterprises (MSMEs) on merit.
UNISAME emphasized that since the State Bank of Pakistan (SBP) has the major role to play, SMEDA and other stakeholders need to align the definition of the SMEs with the definition adopted by SBP. Needless to say that all commercial banks and financial institutions are duty bound to follow the SBP definition of the MSMEs. UNISAME has also urged SMEDA to register all SMEs industry wise, area wise and category wise for specific focused attention once the SME definition is finalized.
President UNISAME Zulfikar Thaver said as chairman of the definition committee of the National Committee of SMEs (NCSMEs) and after consensus of all stakeholders it was resolved by him and the committee to have the employment size up to 250, paid up capital as 25 million and annual sales up to Rs 250 millions as parameters for the definition of an SME in the SME policy 2007. It is almost 15 years that the stakeholders are deliberating on the definition and no uniform definition which is acceptable to all has been adopted.
However the need is felt to revise the definitions of the small and medium enterprises individually and also the need to define them separately to focus on each and make policies to suit and meet the requirements of each separately. The need for a revised definition is felt more due to the value of the rupee and its buying power.
Thaver said that the SBP has proposed revision of the definitions of small and medium separately and has proposed revision for small enterprise as having up to 20 employees and an annual sales turnover of Rs 100 millions. For medium enterprise it has been proposed to revise the definition on the parameters that it is an entity ideally not a public limited company and the number of employees up to 250 and an annual sales turnover of above Rs 100 millions up to Rs 800 millions.
The employment size is inclusive of contract employees. The Union chief on behalf of himself and the SME Council of UNISAME called upon the government to enable SMEDA to adopt the KOSGEB Turkish model to make it meaningful, effective and far reaching. SMEDA needs to be strengthened to meet the challenges.
Secondly he emphasized that until and unless the high impact actions are not taken for the sector like the SME specific bank, the credit guarantee insurance, leasing for commercial property, export house/gallery for marketing support the sector will not get the support it deserves. He also reiterated the demand for a specific SME bank, SME Institute, Chamber of Commerce and Industry and SME Ombudsman and SME liaison committee (SME-LC) for the facilitation of the entrepreneurs.
The strengthening of SMEDA is also very necessary as with lack of personnel and funds it cannot function meaningfully and outreach millions of SMEs. He stated that merely defining the SMEs will not serve any purpose and the real SME promotion and development can only be achieved by facilitating, supporting, encouraging and motivating the sector for growth and modernization.
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