RECORDER REPORT

KARACHI: President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain has said that the Small and Medium Enterprise (SME) sector which significantly contributes to the national economy will adversely effected if the SME bank is being privatized. He said since there is no alternate to this institution is available therefore it is suggested not to privatize SME bank.

He said SME bank has been established on demand of SME sector in 2002 with core objective of providing financial assistance to this sector through easy loans. He said that SMEs have a significant contribution in the total GDP of the Country, according different reports, the share in the annual GDP is 40 percent likewise SMEs generating significant employment opportunities for skilled workers and entrepreneurs. Small and medium scale firms represent nearly 90 percent of all the enterprises in Pakistan and employ 80 percent of the non-agricultural labor force. These figures indicate the potential and further growth in this sector.

Mian Zahid Hussain said the major problem of this sector is the lack of finance which is accounted for 51 percent according to the World Bank survey.

SME bank is the only national financial institution in the country that provides financial assistant to the SME sector through easy loans of Rs. 50 thousands to Rs. 100 millions to the trade and industry fulfills the requirements of SME including women entrepreneurs, auto parts manufacturing, fan industry, furniture industry, gems and jewellery, bicycles, hotels and restaurants and many others in terms of project financing, working capital and leasing.

He said the business community has reservations on the closure or privatization of SME bank as this is the only institution provides financial assistance to the SME sector. Government needs to reconsider its decision of privatizing SME bank and find an immediate remedial strategy to cover the losses of this institution. In addition it is required to pay attention to the SME sector in order to increase the SME sector share in the national economy.