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KARACHI: Around 97pc of micro, small and medium enterprises (MSMEs) are under individual ownership and mainly working in the informal sector.

Since most of the MSMEs are not documented (other than those workers registered under EOBI or a social security program), they are not protected against loss of employment, the Economic Survey 2020-21 showed.

The survey indicated as many as 3.25 million micro, small and medium enterprises (MSMEs) constitute nearly 90% of all the enterprises in Pakistan, and their share in the annual GDP is 40% approximately.

The survey pointed out that globally, the SMEs are considered an important pillar for poverty alleviation as they create jobs, increase standard of living and play critical role in ensuring equitable income distribution.

In Pakistan, the SME sector holds tremendous potential to create a positive impact on the country’s economy.

To enable the SMEs in Pakistan to play their due role in economic development, the Small and Medium Enterprises Development Authority (SMEDA) has taken various initiatives towards fostering growth of SMEs through a broad service portfolio spread across various SME sectors and clusters.

The organization has an all-encompassing mandate of fostering growth of the SME sector through its portfolio of services including business development services, infrastructure development through establishing common facility centres, industry support for productivity enhancement and energy efficiency, human capital development through its training programmes and SME-related projects with national and international development partners.

SMEDA has been committed to supporting the SMEs during Covid-19 and has launched a comprehensive programme of online SME clinic and webinars, training sessions, helpdesks and virtual meetings with key public and private stakeholders to facilitate businesses in such a critical time.

The government acknowledges the significance of the SME sector and is making efforts to provide a level-playing field for businesses by devising policies that are favorable to the SMEs.

The survey showed that the prime minister has constituted a National Coordination Committee (NCC) on SME development on August 12, 2020 with the objective to facilitate development and promotion of SMEs in the country.

In the second meeting of the NCC, held on October 8, 2020, the prime minister approved the National SME Policy Action Plan 2020 to provide the much-needed support to the SMEs.

The Plan 2020 focuses on key areas including SME definition, access to finance, business development services, skills and human resource, technology, market access, infrastructure and entrepreneurship and provides extensive recommendations in each of the aforementioned area.

Key recommendations /initiatives proposed under the plan include simplification of rules, regulations and taxation regime, programmes for SME access to credit, SME quota in public procurement, simplification of SECP procedures, facilitation to participate in international fairs and exhibitions on subsidized rates and developing an SME data bank to bridge the information gap, the survey stated.

Copyright Business Recorder, 2021