Lifetime member SAARC Chamber of Commerce and Industry Pakistan chapter and Chief Executive Officer Pakistan Furniture Council (PFC), Mian Kashif Ashfaq has said that micro, small and medium-sized enterprises (MSMEs) in Pakistan needs more growth capital to boost the sub-region’s resilience to shocks in the wake of COVID-19 pandemic.
Talking to SMEs delegation from Kasur led by Amin Akbar Chopra which called on him here on Sunday, he said economies in South Asia can strengthen their recovery and increase their resilience by channeling growth capital to innovative start-ups and entrepreneurs.
Mian Kashif Ashfaq said much of the support so far provided to MSMEs in the region has focused on ensuring access to working capital for business amid the pandemic but more balanced support is needed both for firms hit badly by the pandemic and for those with high growth potential he added.
The CEO PFC said, “Governments in South Asia especially Prime Minister Imran Khan contributed significantly to the survival of MSMEs during the pandemic through large stimulus package offering interest rate subsidies, refinancing, credit guarantees and mandatory lending quotas”.
He said in the longer term, more attention should be paid to market-based financing via capital markets and digital platforms.
He said SMEs including cottage firms (small manufacturing and home businesses) account for 99.6 percent of all enterprises, 76.6 percent of the workforce and 33.9 percent of south Asia’s gross domestic product (GDP) on average.
He said the credit market for these businesses remains small ,measuring 7.0 percent of GDP and 14.8 percent of total bank lending on average in past although the market is growing. He said micro finance is helping meet working capital needs.
However, Mian Kashif Ashfaq said the rise of non-performing loans in the credit market remains a challenge.
He said a dedicated equity market for small and medium sized enterprises has emerged in the region, increasing its role as a growth capital delivery channel.
Leader of the delegation Amin Akbar Chopra sharing his views said many MSMEs remain unregistered and informal, making it difficult for government support to reach them.—INP
