Trade: (Promoting SMEs best way to revive economy

ISLAMABAD: Chairman United International Group Mian Shahid has said that Small and Medium Enterprises (SMEs) are getting only 5.5 percent out of the total loans issued by the banks which must be intensified for the sake of national development.

In a statement issued here on Sunday, he said SMEs must get 30 percent of the bank advances as over 90 percent businesses fall in this category which cannot be ignored.

He said the importance of the SME sector cannot be overemphasized therefore special incentives should be announced for this sector having 40 percent share in the GDP, 30 percent share in exports and employing millions.

He said majority of the 3.5 million SMEs face problems like law and order, energy crisis, lack of regulatory support, incoherent laws, and lack of market information, skilled labour and want of finances.

State Bank of Pakistan pushed banks to boost SME financing which increased by 20 percent to 299 billion of which loans worth 91 billion or 30 percent got infected, he said.

He said defaults compelled lenders to rethink SME financing as textile and garments sector has emerged ab biggest defaulter which failed on 50 percent of its financial obligations. He called for reviving textile and garments sectors which is steadily going down in competition with China, India, Bangladesh and Vietnam.

He asked the banks to revisit policy of ignoring SMEs and chalk out an implementable plan to develop this critical sector to reduce poverty and unemployment.