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MGT601 SME MANAGEMENT

MGT601 SME MANAGEMENT. Lesson 09. Issues and Policy Development for SME in Pakistan-I. Chapter Learning Objectives. This lecture is concerned with the different issue and other obstacles faced by the policy makers while forming an SME policy for Pakistan. This includes both;

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MGT601 SME MANAGEMENT

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  1. MGT601SME MANAGEMENT

  2. Lesson 09 Issues and Policy Development for SME in Pakistan-I

  3. Chapter Learning Objectives This lecture is concerned with the different issue and other obstacles faced by the policy makers while forming an SME policy for Pakistan. This includes both; long term and short term issues.

  4. Issues and Policy Development Pakistan’s economy is an economy of SME. Policies in the past have given a general perspective, direction and defining broad parameters of activity within the macro environment framework, but efforts have focused on large enterprises, neglecting SMEs, which are at the heart of our economy.

  5. Continued…… SME promotion is an important issue for many government departments and central offices. However, there is an existing lack of coordination and regular information exchange mechanism among institutions which constraints their ability to deliver in the SME development process.

  6. Continued…… One of the issues the lack of coordination; that SMEDA has not been provided with a mechanism to initiate, coordinate, monitor and evaluate initiatives of SME development outside of its own scope of activities.

  7. Continued……. The issues of short to medium term and long term for policy making revolve around three major topics: • Business Environment • Delivery of Assistance and Access to Resources • Monitoring Developments

  8. Business Environment • Creating a favorable business environment for SME in Pakistan’s economy and eliminating unnecessary obstacles, which obstruct their development. • This concerns will be more strong with the relationship between Government and SMEs.

  9. Delivery of Assistance and Access to Resources Improving the delivery mechanism for assistance and the access to the resources for SME in Pakistan, inter alia finance, business development services, qualified human resources and technology, so as to improve their productivity and capacity for employment generation.

  10. Monitoring Developments Harmonizing enterprise size categories for Pakistan of what are to be considered micro, small, medium and large enterprises. Furthermore, the establishment of a sound mechanism by which their development of the SME sector and the effectiveness of the assistance provided the SME can be monitored.

  11. Background Basic Situation of SME and Their Support Structures

  12. Current Status of SME Enterprises employing up to 99 persons constitute about 90%1 of all private enterprises in the industrial sector and SME employ some 78% of non-agriculture labor force.

  13. Continued……… SMEs contribute over 30% to GDP, PKR 140 billion to exports, and 25% of manufacturing export earnings besides sharing 35% in manufacturing value added.

  14. Government’s Socio-economic Strategies in the shape SMEs • Poverty Reduction Strategy Paper (PRSP) • Micro Finance Sector Development Program • SME Sector Development Program

  15. Continued….. • Education Sector Reforms 2001-05 • Reform of Financial Sector • Reforms in Tax Administration

  16. Coordination and Institutional Support Coordination • The role of government as a facilitator of business and its interaction with business support institutions is imperative for the establishment of a mutually beneficial relationship for the growth of the sector. • So, there is lack of coordination and support between the government and SMEs.

  17. Institutional support • Federal Bureau of Statistics • Ministries of Finance and Planning • Ministry of Commerce • Planning Division

  18. Continued……. • Ministry of Food, Agriculture and Livestock • Ministry of Environment • Ministry of Local government and Rural Development

  19. Conclusion The issues highlighted in this lecture give a retrospective view of things while giving a current picture of the SME business environment in Pakistan. There are issues we may only solve in the long term and which therefore are beyond our current scope. And there are issues we may solve in the short to medium term. These issues should become the focus of our SME policy.

  20. Thanks you Happy Learning, Keep Learning

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