Banks should help unleash SMEs potential to lift economy: Mian Shahid

Islamabad: Chairman of the Apna Microfinance Bank Limited (AMBL) Mian Shahid on Friday said that Small and Medium Enterprises (SMEs) will be given preference in provision of credit.He said that he will try best to ensure the uninterrupted flow of finances to the critical SME sector without which economy cannot be revived.

Mian Shahid said this while talking to a delegation of female entrepreneurs led by Farida Rashid, President Islamabad Women Chamber of Commerce and Industry (IWCCI).He said that the role of microfinance banks remains crucial to ensure unobstructed flow of financial resources to the SME sector which is engine of economic growth for country.

Shahid who was recently elected Chairman of the AMBL admitted that the current level of finance and access of SMEs to banking services remains unsatisfactory which calls for serious initiatives.

SME sector represents over 90 per cent of all enterprises, employs some 75 per cent of the non-agricultural workforce and contributes 30 per cent to the GDP, he said, adding that it plays important role in poverty alleviation, and equitable resource distribution.

Speaking at the occasion, Farida Rashid said that SMEs’ growth potential for employment, income generation, and poverty reduction remains mostly untapped in Pakistan. Only 2.5 million people are recorded as active borrowers of microfinance which is discouraging, she said.

Questioning policies which are hindering growth of SMEs, she said that there is a serious need for the small and medium banks to study successful microfinance banks in other countries in a bid to come up with effective and implementable ideas.

Farida Rashid said that authorities must take on the challenge of developing SME by providing an enabling environment, business development services and facilitate their growth agendas.Apart from access to credit and productivity, the other areas hindering business development include labour, taxation, environment and energy, she observed.

The IWCCI president called upon the government and central bank to take steps to unleashing the potential of the SME sector with a focus on improved competitiveness.