SMEs are backbone of Pakistan's economy- Khawaja Jalaluddin Roomi

Former Punjab caretaker Minister for Industry ,well known industrialist and former President of Multan & Dera Ghazi Khan Chambers of Commerce and Industry Khawaja Jalaluddin Roomi said that Small and medium-sized enterprises (SMEs) are the backbone of the Pakistani economy. There are a total of 5.2 million SMEs in Pakistan, representing over 99% of the total business in Pakistan. They employ over 78% of the non-agriculture labor force and contribute 40% to GDP and 25% to exports.

He further said that  More than 21 million people are employed in the SMEs sector of Pakistan. Punjab holds the largest share of SMEs with 65 percent, followed by Sindh at 17 percent, KPK at 14 percent, and Balochistan at 2 percent2.Delivering his speech at a symposium on Micro, Small & Medium Enterprises (MSMEs) Day jointly organised by Multan Chamber of Commerce and Industry (MCCI), in collaboration with the State Bank of Pakistan (SBP) Banking Services Corporation Multan on Thursday. 

Khawaja Jalaluddin Roomi told the audience that the United Nations General Assembly designated 27 June as Micro-, Small, and Medium-sized Enterprises Day to raise awareness of the tremendous contributions of micro-, small, and medium-sized enterprises (MSMEs) to the achievement of the United Nations Sustainable Development Goals (SDGs) .

These enterprises play a vital role in sustainable, inclusive, and resilient economic growth, shared prosperity, and decent work for all. As we commemorate this day, let’s recognize the resilience and innovation of MSMEs in driving forward inclusive growth and contributing to poverty eradication and decent work worldwide

The theme of the day was ‘MSME Finance: Catalyst for Inclusive Growth’ aimed to acknowledge the vital role of MSMEs in inclusive economic growth, employment generation and poverty reduction.

In his opening remarks, president MCCI Mian Rashid Iqbal highlighted the critical role of MSMEs in economic growth, and shared insights on the challenges and opportunities facing the sector. He said that Government should cut its luxurious expenditures insterad of imposing heavy taxes on the sinking industry.

He said that the Micro, Small and Medium Enterprises (MSMEs) were the back bone of inclusive growth and development and had the potential to contribute to half a dozen of Sustainable Development Goals (SDGs) particularly poverty reduction, jobs creation, competitiveness enhancement and productivity of industry and trade etc.

Syed Muhammad Asim Shah Chairman APBUMA said that SMEs are facing difficulties in getting loans from banks for expanding their business. He said that no country can progress without partronising the small asnd medium enterprises.

Asim Shah  reiterated that in line with other developing countries, the SME sector in Pakistan also do not have adequate access to financing from the formal sector and has been primarily relying on the credit facilities from the informal sector, at a cost even higher than the cost paid by those borrowers from SME sector who are able to avail facilities from the formal sources like banks.

Chief Manager SBP Javed Iqbal Marth said that the State Bank of Pakistan (SBP) has introduced an innovative initiative to improve access to finance for small and medium enterprises (SMEs) in collaboration with the government of Pakistan in order to enable businesses which cannot offer security/collateral to access bank finance.

He furthe said that “SBP will provide refinance to banks while the government of Pakistan will support via partial credit guarantees to the participating banks,” it said. “This support is being provided initially for three years to facilitate investments by banks in technology, infrastructure and team building specialised in SME lending, after which SME financing by banks is expected to be sustainable without SBP or government support.”

Several leading commercial banks and locasl artisans installed their stalls to introduce their products