SMEs crash with crashing economy


The ongoing crisis of energy particularly load shedding of electricity and gas and frequent closures of gas stations in Pakistan has hit hard the small and medium sized enterprises, dealing a heavy to national economy.
Union of Small and Medium Enterprises (UNISAME) leaders told Chief Executive Officer (CEO) of the Small and Medium Enterprises Development Authority (SMEDA) Nawaz Ahmad Sukhera Provincial chief Muslim Raza, Deputy General Manager Mukesh Kumar and Manager Feroz Ahmad during a meeting.
UNISAME President Zulfikar Thaver told the meeting that besides the law and order situation and energy crisis the SMEs were unable to function and were running in losses due to high cost of production caused by the increase in prices of raw material and packing material because of the dollar exchange rate and the increase in the prices of fuel which had made logistics costly.
He said that the SMEs need finance at affordable mark up, land at concession, uninterrupted supply of raw material and energy. He added that there was a technological gap and the SMEs need to know about the latest technology in their respective fields. The SMEs need the facilities of leasing to buy commercial property, plant, machinery and equipment, raw material, income generating vehicles to enable them repay in the instalments under pay as you earn scheme and urged the CEO to make strong recommendation to the government for promotion of soft leasing terms for SMEs.
The leasing companies were charging high mark up because they themselves were borrowing from the banks and the SME Leasing a subsidiary of SME Bank was having insufficient funds to cater to the SMEs.
The participants stressed the need for credit insurance to make the banks comfortable in financing the SMEs and issuance of SME credit card for the SMEs to enable them purchase raw material and repay on realisation of sale proceeds.
Sukhera said he was planning to work for export promotion of Pakistani goods on the one hand and the other for making SME units competitive in domestic market.