As per regulations, the "small enterprise" and "medium enterprise (SME)" mean:
(a) small enterprise: -a business entity not a public limited company that has annual turnover up to Rs. 150 million and employees (including contractual) less than 50.
(b) medium enterprise:- a business entity that has annual turnover of more than Rs 150 million but less than Rs 800 million and number of employee (including contractual) between 51 to 100 for trading entity and between 51 to 250 for manufacturing or service entity.
A comparison of SME's definition specified in the draft Non-Banking Finance Companies and Notified Entities Regulations, 2008 and SBP's Prudential Regulations revealed that the SECP has issued the definition of the SMEs in line with the State Bank of Pakistan's Prudential Regulations for Small & Medium Enterprises Financing.
Under the said regulations, a small enterprise and a medium enterprise can avail finance maximum up to Rs 25 million and Rs 200 million (liquid assets under perfected lien of the NBFC may be deducted from the limits), respectively, from a single NBFC, bank or development finance institution (DFI), or from all NBFCs, banks or DFIs.
In case of the borrower being a small enterprise, the NBFC may obtain a copy of financial statements duly signed by the borrower if the amount of finance does not exceed Rs. 15 million.
In case of the borrower being a public company or a private company, which is subsidiary of a public company or a private company having paid up capital of three million rupees or more, the NBFC shall obtain copy of financial statements duly audited by a practicing chartered accountant, while in case of any other company, copy of financial statements audited by a practicing chartered accountant or a practicing cost and management accountant shall be obtained.
Every non-banking finance company (NBFCs) would be required to immediately inform the Commission along with reasons for removal of its chief executive and obtain SECP's prior approval for appointment of the new chief executive.
According to the revised regulations, in case the Board of Directors of an NBFC decides to remove its chief executive before the expiration of his term of office or the chief executive decides to tender his resignation before the completion of his term of office or replacement of Chief Executive on completion of his term, the NBFC shall immediately inform the Commission along with reasons for the same.
Provided that the NBFC shall, within a period of seven days, submit an application complete in all respects, for obtaining approval of the Commission for appointment of the new chief executive, SECP proposed.