SMEs should be given preference in provision of credit : Shahid Rasheed Butt

Lahore: Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt on Sunday said Small and Medium Enterprises (SMEs) should be given preference in provision of credit which will ensure national development. He said that government should ensure uninterrupted flow of finances to the critical SME sector without which economy cannot be revived. 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 Rasheed Butt said that said that 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.

The veteran business leader 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.

Questioning policies which are hindering growth of SMEs, he 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. 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, he observed.