STATE BANK HELPS SMEs GET BETTER ACCESS TO FINANCE
SMEDA CONCLUDES CONSULTATION PROCESS ON SME CREDIT GUARANTEE SCHEME
The Small and Medium Enterprises Development Authority (SMEDA) concluded the consultation process on Credit Guarantee Scheme plan for SMEs at the final consultative meeting held on January 12, 2017 at SMEDA head office with bankers and SMEs, who have recommended to submit the plan as a major budget proposal this year to establish a Credit Guarantee fund with at least US dollar 25 million. Mr. Muhammad Alamgir Chaudhry, General Manager Outreach Divisioin of SMEDA presented address of welcome to the participants. Whereas, Mr. Sheharyar Tahir, Head External Relations Department of SMEDA and Mr. Imran Ahmad of the SBP conducted proceeding of the meeting. The meeting was widely attended by representatives of banks, Development Finance Institutions, private sector and the government’s business development agencies. The prominent participants included Mr. Rehmatullah Javed, Chairman Standing Committee of FPCCI on SMEs, Mr. Imran Ahmad from the State Bank of Pakistan, Mr. Irfan Ahmad, Vice President, NBP, Mr. Liaqat Mehmood from Askari Bank, Mr. Muhammad Shahid, Branch Manager, Pak-Bruni Investment Company, Ms. Rukhsana Bukhari, Vice President First women Bank Limited, Mr. Ali Abbass from Bank Al Habib, Mr. Sikandar Abbasi, CEO, FINCON, Mr. Raza Hafeez Shami, CEO, RM Engineering Industries, Mr. Farid Ahmad, RVP Albarqaka Bank, Mr. Naveed Ahmad, Vice President BOP, Mr. Naveed Nasir from ABL, Mr. Behram Bashir, VP, SME Bank Limited, Mr. Sultan Tiwana, Private Consultant, FINCON, Mr. Shehzad Latif, SVP, Soneri Bank Limited, Mr. Tanveer Ahmad Haral, Head Strategic Marketing, NRSP Microfinance Bank, Mr. Shehbaz Sarwar, Additional Registrar, SECP, Mr. Saleem Akhtar, Channel Manager SCBL, Mr. Sohail Siddiqui, Product Manager SME, Bank Al Falah, Ms. Aysha Aamer, Chief Manager, Bank of Khyber, Mr. Saqib Ayaz, Regional Head SME, Samba Bank and Ms. Nadia Jahangir Seth, Head Policy and Planning Department of SMEDA.
Mr. Muhammad Alamgir Chaudhry, in his address of welcome, acknowledged that strong patronage from State Bank of Pakistan, the SMEs were having better access to finance as compared to negligible access available in the past. However, the banking industry is still not comfortable to issue the adequate credits to SMEs due to high risk, which can be covered by introducing a Credit Guarantee Scheme commonly being practiced in plenty of the growing economies in the World, he said and informed that SMEDA, taking cognizance of the need had developed a comprehensive feasibility study for the required scheme under aegis of the Investment Promotion Unit, jointly organized by the United Nations Development Organization (UNIDO), SMEDA and Government of Italy. A continued consultation process in collaboration with the State Bank of Pakistan was started last year to have the feedback from government of Pakistan, bankers, SMEs, trade bodies and other relevant stakeholders, the concluding episode of which has been arranged at head office of SMEDA, he added.
The presentations given by SMEDA, State Bank of Pakistan and FINCON revealed that the formal lending of SMES in Pakistan was much less than the actual requirement. According to the feasibility study compiled by FINCON for UNID0-SMEDA-ITALIA Investment Promotion Unit, the SMEs were being provided only 6% of the total formal lending by financial institutions, whereas the share of SMEs’ lending in our neighboring countries is around 30% of the total credits. The default risk in the SME-based economies of the world have been covered by the Credit Guarantee Schemes and there are more than 2, 250 credit guarantee schemes (CGS) in 100 countries of the world. Therefore, the feasibility has offered a complete mechanism for creating a full-fledge Credit Guarantee scheme for SMEs in Pakistan, proposing major chunk of funds from international donor agencies, World Bank, USAID, DFID and Italian Development Cooperation. As per the feasibility, Credit Guarantee Scheme fund should be up to USD 25 million and the investment in fund is expected to generate approximately 0.5 million direct jobs followed by a GDP of Rs. 250 Billion and an additional tax revenues up to Rs. 33 billion over ten years. The government of Pakistan may be asked to share 20 % of the total required fund or to match the equal amount of fund as to be generated through donor agencies and the fund would be managed by setting up a Credit Guarantee Fund Company to be working as a Public Limited Company.
It is notable that stakeholders meetings earlier held in Karachi, Peshawar and Islamabad have also unanimously recommended to take up the feasibility of CGS with government of Pakistan. Therefore, SMEDA, as per recommendation of the concluding consultative session held today would submit the detailed feasibility as the major proposal for the forthcoming Federal Budget 2017-18.
SMEDA Invites Proposals for Federal Budget 2017-18
SMEDA, in its efforts to support SME development in the country, conducts a round of consultation with different stakeholders including SMEs, Chambers of Commerce & Industry and Trade Associations for obtaining views/inputs related to the SME Sector for developing recommendations for consideration of the government while formulating the Federal Budget. SMEDA has initiated an exercise to solicit recommendations for Federal Budget 2017-18.
Policy & Planning Division
SMEDA, 5th Floor, Aiwan-e-Iqbal Complex
AWARENESS SEMINAR ON ENTREPRENEURSHIP AS A CAREER OPTION
Entrepreneurship is the real way forward to reposition economy of Pakistan for reducing poverty and increasing jobs in SME sector. It was observed by the business experts while speaking at one-day awareness seminar on “Entrepreneurship as a Career Option” organized by the Small and Medium Enterprises Development Authority (SMEDA) in collaboration with COMSATS. The speakers included Mr. Javed Afzal, Deputy General Manager Outreach Division, SMEDA, Mr. Ghulam Husain, Manager COMSATS and Mr. Abu Bakar, CEO Engineering Hut, who shared his success story with the participants.
Mr. Javed Afzal, Deputy General Manager Outreach, SMEDA while speaking to the audience said that SMEDA had a network of regional offices in the major cities of Pakistan, involved in providing business counseling and other business development services to the young people aspiring for setting up their new small businesses. He also briefed the students about the various development projects of SMEDA that have been established by the funding by the Government of Pakistan for the development and promotion of the related business sectors in the country. He emphasized upon the participants to pursue entrepreneurship as career option and also avail the business development services from various initiatives of SMEDA and other relevant business support organizations in the country.
The young successful businessmen Mr. Abu Bakar, while describing his success story on the journey towards entrepreneurship, said that despite so many problems, Pakistan was the best place for business. Therefore, the educated youth should opt the entrepreneurship as a career to play an active role in economic development of their Country and the nation. He said that business graduates having specialization in various disciplines business management can easily develop themselves as successful entrepreneurs. He said that youth may also avail of SMEDA services and guidance in establishing the small businesses in various fields of SME sector.
Earlier, Mr. Ghulam Hussain, Manager COMSATS in his opening address, highlighted the objectives of the seminar and underlined the importance of youth towards education and development of their skills in pursuance of entrepreneurship. He said that the country was faced with the challenges like unemployment and if youth entrepreneurship gets promoted and the opportunities are tapped by youth for adding value to wide range of products, then it can help to relieve the pressure on job market. He appreciated the role of SMEDA for holding such awareness seminars for the guidance of university students.
This is notable that realizing the growth potential of youth entrepreneurship in the country, Small and Medium Enterprises Development Authority (SMEDA) has launched a proactive move for developing and promoting entrepreneurship particularly among the educated youth for raising awareness and building capacity of the graduating students for business start ups.