Union of Small and Medium Enterprises to Highlight impediments to Small and Medium Enterprises Growth at 7th SME Conference: Zulfikar Thaver
Karachi, September 18, 2013 (PPI-OT): The Union of Small and Medium Enterprises (UNISAME) informed the viewers at a local television business channel that the SME sector cannot be neglected under any circumstances as the sector is the majority sector and deserves the best attention of the policy makers for economic growth.
President UNISAME Zulfikar Thaver narrated the impediments to SME growth and said the union representative will seize the opportunity and raise the issues at the 7th SME conference to be held at Lahore tomorrow under the patronage of stakeholders.
He said the most important issue is the non implementation of the SME policy which envisages the establishment of the many institutions very necessary for SME promotion and development.
He lamented that the SME Bank is deprived of sufficient funds to cater to the sector and unable to finance the SMEs broadly. The SME Leasing a subsidiary of SME Bank cannot function fully due to lack of funds.
If the SMEs are provided leasing facilities for purchase of plant and machinery, farm machinery, generators, tractors and harvesters at subsidized rate the farm sector will develope rapidly but unfortunately the leasing companies are themselves borrowing from banks and therefore cannot offer special rates.
The SME Venture Capital fund has not been created and also the full fledged SME Credit Guarantee Insurance.
The sector needs a mortgage financing institution to look after the financial needs of the SMEs desirous of purchasing moveable or immoveable property, raw material and inventory building and urged the State Bank of Pakistan (SBP) to work on the concept of mortgage financing supplemented by the collateral management companies.
The SMEs are also complaining of high bank charges and the non negotiations of bills drawn on buyers of third world countries due to low rating banks and urged the SBP to examine the issue and facilitate the SMEs.
Secondly the banks are demanding 100% margin for establishment of import letter of credits whereas the title of the goods and lien will remain of the opening bank till such time the documents are retired by the importer. The banks lack risk management and collateral management.
Besides the financial institutions the sector has been promised the SME Institute of Technology to fill the technological gap, the SME Chamber of Commerce in the SME policy and he urged the ministries of industries and also commerce to expedite the matter on top priority basis and arrange for funds to establish the institutions.
The Trade Development Authority of Pakistan (TDAP) has also done the homework for the establishment of the SME Export House and a steering committee is in place and the draft model prepared and it is over 3 years now but the TDAP is lethargic and delaying the project unnecessarily to the detriment of the sector.
In addition to the above the union chief demanded protection squads in industrial areas for controlling law and order and the formation of the SME Liaison Committee (SME-LC) specifically for the sector.
The union will also invite the attention of the chief executive officer (CEO) of the Small and Medium Enterprises Development Authority (SMEDA) to the lack of incentives for new comers and lack of industrial estates for SMEs, the infrastructure is really bad in some areas and logistics facilities are lacking for marketing farm produce resulting in wastage of perishable goods of the SME farmers.
The union has urged Menin Rodrigues CEO of Shamrock Communications organizers of the 7th SME Conference to emphasize the urgent need to exempt the import duty on alternate energy devices to promote and facilitate the utilization of alternate energy devices and reduce the burden on the national grid.
For more information, Contact:
Union of Small and Medium Enterprises (UNISAME)
75/1 3rd Commercial Street,
Phase IV, D.H.A., Karachi, Pakistan
Phones: + 92 35884225 and 6
Cell: + 92 300 8245307 and + 92 321 8245307
Fax: + 92 35380642