SME Policy 2007

SME Led Economic Growth - Creating
Jobs and Reducing Poverty
Ministry of Industries, Production & Spec...
SME Policy 2007                                                                                 2

Table of Contents

SME Policy 2007                                                                               3


BMO     ...
SME Policy 2007                                                                            4

SECP                       ...
SME Policy 2007                                                                            5

SME Policy 2007                                                                            6

The br oader object ives to...
SME Policy 2007                                                                                           7

SME Policy 2007                                                                              8

and industries, trade ass...
SME Policy 2007                                                                                9

The Pol icy framework i...
SME Policy 2007                                                                            10

   gover nme nt levels. SM...
SME Policy 2007                                                                            11

        Section II      ...
SME Policy 2007                                                                            12

       The SME Policy rea...
SME Policy 2007                                                                                                 13

SME Policy 2007                                                                                         14

SME Policy 2007                                                                               15

large, thus, not pr ovi...
SME Policy 2007                                                                            16

       Capacity buildi ng...
SME Policy 2007                                                                              17

       Review of Prude ...
SME Policy 2007                                                                            18

attuned to t he SME needs ...
SME Policy 2007                                                                                         19

       Launc...
SME Policy 2007                                                                                          20

created and ...
SME Policy 2007                                                                                                  21

SM E Polic y I mple me ntati on Plan
           Propos e d            Pri nc i pal i mple me nti ng     E s ti mate d

Section V - Monitoring, Evaluation, and Continuous
                Improvement of Policy
Monitoring and Evaluation
In orde...
SME Policy 2007                                                                                     24


SME Policy 2007                                                                            25

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  1. 1. SME Policy 2007 SME Led Economic Growth - Creating Jobs and Reducing Poverty Ministry of Industries, Production & Special Initiatives Gov ernment of Pakistan Turn Potential into Profit Small and Medium Enterprise Development Authority Government of Pakistan
  2. 2. SME Policy 2007 2 Table of Contents Abbreviations Executive Summary 5 Section I Introduction Background 7 Economic Rati onale/P erspective 8 Small Business Promoti on: Historical Perspe ctive 9 SME Developm ent – Rece nt Ste ps by GoP 9 Section II SME Policy: Objectives, Scope & Principles SME Policy – Objectives 11 SME Policy – Scope 11 SME Policy – Pri nciples 11 Section III SME Policy Recommendations SME Developm ent Visi on 13 SME Policy S tatement 13 SME Defi niti on 14 Business Environment 14 Access to Finance & Related Services 16 Supporti ng Human Res ource Developme nt, Tech Up- gradation & Marketing 17 Entrepre neurshi p Devel opment 19 Section IV SME Policy Implementation & Resource Allocation SME Policy – Ownership & Implementation 21 SME Policy – Investme nt & Ex pected I mpac t 21 Summary of R esource All ocation 21 SME Policy I mple mentati on Plan 22 Section V SME Policy Monitoring, Evaluation & Coordination Moni tori ng & Evaluation 23 Coordi nation 24 SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  3. 3. SME Policy 2007 3 Abbreviations BMO Business Membershi p Organization BDSPs Business Development Service Pr oviders BIP Business Improve ment Prog ram CBR Central Board of Reve nue CCIs Chamber of Comme rce & Industries CIB Credit I nforma tion Bur eau CFC Common Facility Center EPZs Export P roc essing Zones EPZA Export P roc essing Zones Authority EPB Export P romotion Bur eau NCSMEs National Commi tte e on S mall & Medium Enter prises FBS Federal Bureau of Statistics FPCCI Federation of Pakistan Chambe r of Comme rce & Industry FIs Financial Institutions GoP Gover nment of Pakistan GDP Gross Domestic Pr oduct HEC Higher Education C ommission HRD Human Resource Devel opment ISIC Inter national Standard I ndustrial Classification ILP Industrial Links Program LUMS Lahore University of Ma nageme nt Scie nces MEs Medium Enter prises MTDF Medium Ter m Developme nt Fra mework MoC Ministry of Comme rce MoIP&SI Ministry of Industries, Produc tion & Special Initiatives MoI TT Ministry of Inf orma tion Tec hnology & Telecom MoST Ministry of Science & Tec hnology PIM Pakistan Institute of Ma nageme nt PRSP Poverty Reduction Stra tegy Paper PAAPAM Pakistan Association of Automotive Parts & Accessories Manufacture rs PCSMEs Provincial Committees on S mall & Medium Enter prises R&D Research & Developme nt SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  4. 4. SME Policy 2007 4 SECP Securities & Exchange Commission of Pakistan SMEDA Small & Medium Enterprises Developme nt Au thority SMEs Small & Medium Enterprises SEs Small Enter prises SBP State Bank of Pakistan TEVTA Technical Education & Vocati onal Training A uthority TUSDEC Technol ogy Up-gradation & Skill Developme nt Compa ny TDAP Trade Development Authority of Pakistan TICs Technol ogy Innovation Ce nte rs TAs Trade Associations UN United Nations VC Venture Capital WTO World Trade Organization SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  5. 5. SME Policy 2007 5 Executive Summary SME sector is the backbone of Pakistan’s economy. The signi fica nce of their r ole is clearly indicated by various statistics. According to more rec ent estimates there are appr oximately 3.2 million business enter pris es in Pakistan. Enterprises employ ing up to 99 persons constitute over 90% of all pr ivate enterprises in t he industrial sector and employ nearly 78% of t he non-agri culture labour force. They contri bute over 30% to t he GDP a nd acc ount 25% of exports of manufactured goods besides shari ng 35% in manufacturi ng value added. Prom otion of SMEs has therefore been t he center pi ece of G overnme nt’s strategy for economic revival, poverty alleviation and e mployment ge neration. To this end, t he logical first step was the formulation of a compr ehe nsive SME Policy reflec ting the viewpoi nts of multi ple stakeholders. The Governm ent of Pakistan thus constitut ed an SME Task Force, by Notifi cation No.1(68)/2003-Inv-III of 29 January 2004 of t he Ministry of I ndustries and Producti on. SME Task Force i ncluded bot h public & pr ivate sector mem bers. In order t o enable t he SME Task Force to work effe ctively, four Working Committees were setup to carry out tec hnical analyses, deliberate findings and address foll owi ng core issues: i. Business Environment - Creating a favorable business environme nt for S MEs in Pakistan's economy and elimi nating unnece ssary obstacles, reducing c ost of doing business ii. Access to Finance - Increasing SMEs’ access to formal fi nance i ncludi ng equity fina ncing w hile addressing the question of ‘ lacking d ocumentati on’ and banks' technical capabilities and impr oving SMEs' c apacity to bec ome bankable. iii. Access to R esources & Services - Improvi ng the delivery mec hanisms for assistance and access to resources for SMEs in Pakist an, inter alia business development services, qualified human resources, marketing and technol ogy, so as to impr ove their com pet itiveness, productivi ty and capacity for em ployment generation. iv. SME Definition, feedback, Monitoring & Evaluation Mechanism - Establishing appr opriate and harm onized defi niti ons for Pakistan of what are to be categor ized micr o, small, medium, and large e nter prises. Furtherm ore, the establishme nt of a s ound m echanism by whi ch devel opm ent of t he S ME sector and effective ness of assistance pr ovided t o S MEs can be m onit ored. The Worki ng Committ ees after due de libe ration, fi nalized t heir rec omme ndations. In order t o ac hieve consensus, wide scale Nati onal, Pr ovincial & Regi onal consultations were he ld. The partici pation of stakeholder s has been the refore, t he c or nerstone of the pol icy devel opme nt pr ocess. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  6. 6. SME Policy 2007 6 The br oader object ives to be ac hieved by S ME Policy as contained i n t his docume nt are; across the board r ecogniti on of SMEs as a sector requiring separate poli cy & regulatory space, de fine SMEs that qualify for support, pr opose c ounter balanci ng measures to eliminate d isadvantage of size, remove unnecessary regulatory burd en, institute SME support m echanism in both public & private sectors, im prove suppor t delivery mec hanisms and establis h polic y evaluation and review systems. Speci fically t he P olicy envisions i ncreasing t he s hare of manu facturing small enter prises from 5.5% to 7%, while de creasing the t hreshold and density of regulations there by reduci ng t he c ost of d oing business. It also sets the target of increasing the share of SMEs in value added pr oducti on t o 40%, and wome n owne rshi p to incr ease to 6%. A number of measures are proposed to achieve these obje ctives including setting up SME support fu nds and creating a mutually cooperative & facilitative, hassle fre e busine ss environm ent. The Policy also contains outli ne of a monit ori ng mechanism at the Federal & Provinc ial levels to oversee and assess impact of SME development initiatives bei ng impleme nted u nder t he P olicy. The Federal Cabi net of Pakistan was pleased to appr ove SME P olicy on January 17, 2007. The appr oval of SME P olicy ushe rs in a new e ra of focused SME devel opment initiatives necessary for this sector to realize its true potential and contri bute towards economic developme nt. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  7. 7. SME Policy 2007 7 Section I Introduction Background According to the rece nt Ce nsus of Establishments conducted by the Fede ral Bureau of S tatistics (FBS) there are a bout 3.2 milli on e conom ic establishments i n Pakistan. Out of these small and medium size enterprises (with employment base up to 99) constitute a bout 90% of all private enterprises employing appr oximately 78% of non- agriculture labor force 1. SMEs contributed ov er 30% to GDP, 25% in export earni ngs besides sharing 35% i n manu facturing value addition 2. Economic indi cators clearly reveal the impor tance and pote ntial of the SME sector i n the nati onal econom y. This realization led the Gover nme nt of Pakistan (GoP) t o identi fy SMEs as one of the four pillars of economi c revival plan laid out in 1999- 2000. In orde r to devise a basic framework for the growt h and devel opme nt of SMEs the Governme nt of Pakistan constitute d a Task Force for SME Pol icy Devel opme nt i n January 2004 under the chairma nshi p of Se c retary, Ministry of Industries, Producti on and Special I nitiatives. The Task Force, c ompr ising of Gover nme nt officials and major private sector stakeholders, was established wit h t he foll owi ng object ives:  Achieve discrete policy and re gulatory space for SMEs along wit h identi ficati on of key areas for re forms c once rni ng laws, regulations, and programs.  Develop SME Policy id enti fyi ng r oles of Fede ral, Provincial and Local Governme nts and private & public sectors i n SME sector devel opm ent.  Defi ne princ iples of SME support and set pr iorities.  Institutionalize SME support t o ensure re gular informati on sharing among Federal, Provincial, Local Gover nme nts and SMEs.  Propose detailed pr ocesses and time bound action a nd resource requireme nt for SME sector developme nt and support pr ograms.  Propose separate ec onomic indi cators t o institute moni tori ng and evaluation mechanisms for SME Polic y and P rograms.  Propose a National level Authori ty to coor dinate activities for SME developm ent. The Task Force further constituted four Working Committe es to deli berate upon t he areas of i) Business Environme nt ii) Access t o Fi nance & Related Services, iii) Access to Resources & Services and iv) SME De fi nit ion, Fe edback & M oni tori ng Mec hanism. The SME Policy has bee n devel oped as a result of the deli berati ons of the SME Task Force and its four Working Committees. The SME Policy formulation was a partici patory proc ess through which private sector bodies, chambers of c ommerc e 1 Census of Establishments-2005 2 Economic Survey of Pakistan 2003-04 SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  8. 8. SME Policy 2007 8 and industries, trade associations, publ ic sector organizations and more than 1000 SMEs were consulted across the country. Economic Rationale / Perspective Having reac hed macro ec onomic stabilit y in the first five years of the new mille nnium the GoP is now looking at second- gene ration econom ic reforms to tri gge r economi c grow th and reduce poverty. It is realized t hat t he pol icy i nterve nti ons i mple ment ed during t he last five years, though essential, are not sufficie nt t o foster broad based economic grow th. Nonet heless, the fiscal space created as a result of the strict fina ncial disci pli ne e nforc ed i n past few yea rs pr ovides GoP wit h an opportu nity to invest in supporti ng private sect or led economi c growt h i nitiatives. This gr owt h, if well distributed amongst various ge ogra phi c al regions and social populati on gr oups, may address the thr ee main economic c hallenges faced by Pakistan t oday, i.e.  Poverty;  Job creation; and  Rural developme nt; GoP has identifi ed SMEs as one of the four priority areas for ec onomi c gr owt h. The Poverty Reduction Strategy Paper (PRSP) and the Medium Term Development Framework (MTDF) clearly proposes SME developm ent as a key policy option for poverty reducti on a nd private sector devel opment. The Gover nme nt is taking a num ber of measures for private sect or d evelopment includi ng li beralization of ec onomy, i nvestment pr om oti on; ex por t facilitati on, fina ncial sect or re forms, capital market re forms and creati on of a c onducive business environme nt. There is, however, a need t o c reate an SME focus amongst t hese polic y initiatives to allow si gni fica nt accrual of economic gains for t he SME sector. Interventions focused at SME led private sec tor devel opment will not only contri bute to hi gher grow th rates but wi ll also e nsure that the i nequalities in i nc ome generati on and accumulation of wealt h are addressed. Inclusion of mar gi nalized gr oups and geographical areas are mandated by higher incide nce of poverty, e.g., 34.7% in rural areas as compared to the 20.9% urban areas 1. Also an SME led strate gy will allow a wide geographic and sect oral spread for inv estments and job creation includi ng rural areas of the cou ntry. An SME led private sector growt h strategy i s also in line with the lessons learned in the 60s industrialization process during w hich although GDP growth rates of 6.0+ were achieved but the skewed income distri bution resulted in rising poverty. The 60s strategy was primarily based on suppor t to large-scale manufacturi ng. The SME Pol icy Task Force t hus recom mends t hat private sect or le d ec onomi c grow th strate gy should be primarily based on SME devel opme nt. To achieve t his obje ctive a cohere nt policy framework is pre sented i n t his SME Poli cy d ocument. The Task Force feels t hat unleashi ng t he e ntre preneurial pote ntial of the people of Pakistan is the basis on whic h fast and sustainable ec onomi c gr owt h can be ac hieved. 1 PRSP December 2003 SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  9. 9. SME Policy 2007 9 The Pol icy framework is expe cted t o c ontr ibute i n e nter prise growt h based on t he human capacity a nd market opportu nities available i n t he c ountry. Small Business Promotion - Historical Perspective Whil e devel opi ng t he P olicy framew ork t he Task Force reviewed t he past initiatives i n this area. The various levels of the Gov ernme nt in Pakistan have, in the past, formulated and to an exte nt im plem ente d small-scale business pr om otion policies. However, t hese policies we re lim ited in the ir scope, to be gi n wit h, and are not i n li ne with t he dy namics of present time. Governme nt of Pakistan, initiated small ind ustries prom otion t hr ough formation of the West Pakistan Small I ndustries Cor porati on. Alt hough t he Corporati on created an impact i n its early years yet its Pr ovi ncial successors could not sustain its cont ributi on due t o various limitations. The foll owing features of the Provi ncial Small Industries Cor porations make them i nappropriate and i nsuffic ient in prese nt time:  Over emphasis on i ndustrial and manufactu ring activities wit h little focus on service sectors  Over emphasis on ‘hardware’ support (la nd , electricity, machiner y, etc) wit h little or no emphasis on ‘software’ support, i.e. informati on, business developm ent services et c.  Lack of cohere nt poli cy framework t hat d etermines t he r ole of all relevant stakeholders ot her tha n the dedicated i ns titutions created for small scale industry support  Lack of com plime ntary skill devel opment ini tiatives The Youth Investme nt, Yell ow Cabs and S elf-em pl oyme nt promoti on i nitiatives of the 80s and 90s follow ed t he small-scale i ndustrial prom oti on policy of t he 60s and 70s. These schemes were limited in scope and designed as such that they did not address the core issues of enterprise development and em pl oyment gr owt h and suffered fr om political ma nipulati on accruing t o bad l oan portfoli os of banks and loss of publ ic fu nds. These schemes c ont ri buted littl e in economic gr owth and empl oyme nt creati on. I n some ways these initiatives created t he mindset of the banking com munity t hat is to date, respons ible for a cautious stance towards SME fina ncing i n Pakistan. SME Development – Recent Steps by the Government In the rece nt past SMEDA stands out as a significa nt step towards GoP commit ment to SME devel opment. Created as an autonomous instituti on with pr ivate sector led gover nance structure, SMEDA promises to bec ome an im portant i nstitution spearheading Gover nme nt’s SME development efforts. However, i n abse nce of a cohe rent SME devel opm ent policy framework it is u nrealistic t o e xpec t a singl e orga nization such as SMEDA, to be able to impleme nt aggressive SME developme nt initiatives because:  Issues to be addressed for SME developme nt fall wit hi n the purview of a large number of Mi nistries and Departm ents at the Federal, Provinc ial and Local SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  10. 10. SME Policy 2007 10 gover nme nt levels. SMEDA has no i nstituti onal jurisdict ion or l inkage with such institutions; and  SMEDA has limited budget and manpowe r, posi ng restricti ons on its capacity to launch capi tal inte nsive initiatives and exte nd its outreach Creation of the SME Bank also marks the Governme nt’s commitme nt t owards SME developm ent agenda. The Bank, however, is in its early days of a major restructuri ng exercise and focuses on a single issue faced by SMEs, i.e., access to financ e, and that too on a very limit ed scale. Thus to provide a cohere nt policy mec hanism, there is a need to develop a comprehe nsive SME Polic y for Pakistan that defines t he r ole of c onc erne d publ ic sector instituti ons. Such a Policy framewor k will provide the required directi on and focus for achieving SME led economic gr ow th resulting in j ob creati on and reduct ion in poverty. Private sector gr owt h i n SME sector (as opposed to t he lar ge scale manufacturing) wil l result i n lesser i nvestme nts pe r j ob created, wide r geographic and social spread of i nvestments and be tter i nc ome distributi on. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  11. 11. SME Policy 2007 11 Section II SME Policy: Objectives, Scope and Principles Objective The objective of S ME Policy is to provide a short and a medium to l ong- term poli cy framework wit h an impleme ntati on mec hanis m for achievi ng higher ec onomic gr owt h based on SME led private sector developme nt. Scope The SME Policy suggests concurre nt and spe cific poli cy measures in all possible areas of S ME developme nt:  Business environme nt  Access to fi nance  Human resource developme nt  Support for tec hnology u p-gradation and ma rketing A single SME de finition is rec omme nde d to be applicabl e t o all i nstituti ons countryw ide to allow uni formity in desi gni ng support systems and incentives and also to m onit or pr ogress. The SME Policy also contains an implem e ntation and adjustment mechanism that identi fies t he foll owi ng:  Impleme ntati on a nd m onit ori ng mec hanism  Capacity buildi ng r equirements of t he publi c institutions  Resource allocati on and pot ential s ources of fundi ng  Linkages wit h ot her i nitiatives and pu blic sector reform pr ocesses (Social Sector R eforms)  Self c ontained framew ork for ongoing feed back and adjustment  Role of various public a nd private sector players at Federal, Provincial and Local l evels Principles The Poli cy finds it a ppr opriate to hi ghlight the key principl es on whi ch i t is bei ng based. They are:  The recommendations pr oposed i n t he SM E Policy may be im pleme nted / support ed t hrou gh a n SME Act 2006  The SME P olicy covers measures for pr omotion of ‘Ent repr eneurshi p Culture’ and support for gr owt h of e xisting e nter pris es SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  12. 12. SME Policy 2007 12  The SME Policy realizes t he di ffere nt approac hes required for supporti ng Small Enter prises as opposed to M edium Enterprises. Thus, wherever required, separate policy measures are pr oposed for small and for medium ente rpr ise grow th  Wome n and othe r margi nalized gr oups are proposed to receive spec ial focus withi n t he SME P olicy  Rural based and agro processing ente rprise s are proposed t o receive special attenti on w hile devising speci fic support mec hanisms  SME developme nt offers most viable opti on for private sector led growt h t hat reduces poverty and creates a large num ber of j obs all across Pakistan  SME development must be at t he cent er sta ge of all ec onomi c grow th polici es of Pakistan  SME developm ent in Pakistan wil l require d ecisive and concurre nt measures in a number of policy areas such as business regulations, fiscal, trade rules, labour, ince ntives and support ( Human Resource Developme nt, Technol ogy, Marketing, etc.) leadi ng to an ‘SME Space’ i n these d omains  SMEs face inhere nt disadvantages (because of the ir size) vis-à-vis large firms, whic h ne ed t o be offset by governme nt support mec hanisms and ince ntives  Effective impl ementati on of the Pol icy fr amework will require ow nership, commitme nt a nd m onit ori ng at hi ghest level of the G over nment  SME developme nt requires pr ovision of l e vel playing fiel d for smaller firms vis-à-vis large enterprises  Private sector w ill be e nc ouraged t o play a key role in impleme ntation of the SME Policy inc luding mobilization of capital and operati onal responsibili ty for impleme nti ng policy measures suggested in t his docume nt  Financial support t o enter prises will be, wherever possible, at a collective level, and will essentially require resourc e commit ment on behal f of t he bene ficiari es SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  13. 13. SME Policy 2007 13 Section III SME Policy Recommendations SME Development Vision “SME led ec onomi c gr owt h resulti ng i n pove rty reducti on, creation of j obs and unleashi ng the ent repr e neurial pote ntial of the pe ople of Pakistan” Threshold on taxation and density GoP - SMEs have Developed of regulations rationalized mutual Cooperation & Trust Manufacturing SEs increase their GoP Facilitates Access to share from 5.5% to 7% sustainable BDS in all areas of country Share of Micro Enterprises in employment decreases by 7% SMEs get access to qualified HR, Markets & Technology SMEs increase their share in value added to 40% SMEs have access to Support SME Vision 2015 Funds across Pakistan Share of Women ownership in SMEs increases to 6% GoP is continuously documenting statistics on SME Development and Int'l Benchmarks No. of Start-up Enterprises by University Graduates increases to 6% GoP is delivering reliable periodic reports on SME development including details on funding and SMEs observing their basic efficiency of system responsibilities for social & corporate compliance SME Policy Statement “To create globally competitive SMEs by creating a hassle free business environment, ensuring provision of modern infrastructure & institutional support structures for access to resources & services. The Government shall take measures for promotion of women entrepreneurship, cluster development and also focus on neglected/untapped sectors of the economy. Strengthening Industry- Academia linkages shall also be a key feature of the Policy” To achieve the object ives set-out in t he SME Policy S tatement, t he fol lowi ng recomme ndati ons are put forward i n various areas affecting SMEs in Pakistan. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  14. 14. SME Policy 2007 14 SME Definition Problem Statement Pakistan does not have a single defi niti on of Small and Me dium Enter prises. Various Governme nt age ncies, e.g., State Bank of Pakistan (SBP), Federal Bureau of Statistics (FBS), Provincial Labour De pts., etc. use their own d efi niti on. Absence of a single SME defi niti on makes it di fficult t o id enti fy target firms, align developme nt programs, colle ct data and m oni tor pr ogress. Policy Recommendation GoP may adopt a single S ME Defi niti on t hat is accepted by all publ ic and private agencies. However, various orga nizations m ay be allowed a tw o-year time frame t o align t heir curre nt SME de fini tion i n line w ith t he SME Defi niti on pr oposed i n this Policy. SME defi niti on is as foll ows: Enterprise Category Employment Size Paid Up Capital Annual Sales (a) (b) (c) Small & Medium Up to 250 Upto Rs. 25 Million Up to Rs. 250 Million Enterprise (SME) The Federal Gover nme nt, in li ne wit h t he economic developme nt of Pakistan may, from time t o time m odify the el igi bilit y crite ria as it sees fit. All providers of services receiving fu ndi ng fr om t he G overnme nt ma y defi ne m ore narrow scopes for specific targeti ng purposes. Detailed resource all ocation, princ ipal im pleme nti ng a genc ies & time- frame for establishing a single S ME Defi niti on in Pakistan is anne xed. Expected Impact Single SME Defi niti on is expec ted to create focus in Gover nment policies (targete d towards SME developme nt) and uni formity in com pilation and re porting of SME related data. Business Environment Problem Statement The fiscal, labour and ent erpr ise regul ations of the Fe deral and Provi ncial Governme nts i n Pakistan do not provide for a focus on SMEs that is i n li ne wit h their speci fic needs. Generally t he fiscal r egulations divide enter prises by inc ome levels and labour re lated re gulations realize only tw o forms of ente rprises, small and SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  15. 15. SME Policy 2007 15 large, thus, not pr ovidi ng laws and impleme ntation mec hanisms that are sensitive to SME needs. Largely, t he support and grievance r edressal regime of t he Gover nme nt d oes not differe ntiate be tween ente rpr ises on t he basis of t heir size thus making i t difficult for SMEs to access public support programs and attenti on of publ ic authori ties whe n competing for i t wit h the large firms. This dilutes the abilit y of SMEs to e ffec tively compete wit h lar ge firms. Policy Recommendations  The Task Force recomme nds promul gation of a n SME Act that (i n additi on t o addressing ot her issues related to SMEs) pr ovides for identifi cation of fiscal, registration, labour and inspe ction laws that may be simpli fied for Small and/or M edium Enter prises.  A business entity may be certi fied as an SME by a simple pr ocess to be exercised by SMEDA i n partnershi p wi th ot her governme nt a gencies, cham bers of c ommerce and industries, trade associations and other private sector represe ntative orga nizations. The process of SME Certificati on is proposed to be voluntary for those fir ms who choose t o do so, to benefi t fr om t he support mechanism and simpli fie d re gulatory re gime proposed through t his P olicy.  The Federal Gover nme nt may encourage pe riodic review of all fiscal laws in for ce wit h a view to facilitate and i mpr ove gr owt h of the small & mediu m enter prises  Periodi c review of Labour Le gislation w ith a view of facilitating small enter prise gr owt h may be under taken where by applicabili ty of certain laws may be relaxed for SEs for a certain pe riod of time. However, pr ovision of education/assistance t o SMEs t o ac hieve proper safet y at w ork and c omplianc e with i nter national c onve ntions shall be essential.  SME Desks may be established at the Fed eral, Provincial, Banking and Tax Ombudsman Offi ces for hand ling a nd a ddressing SME grievances. The Com plaint Ce ll establis hed at State Bank of Pakistan may also facilitate redressal of SME c om plaints.  A minimum quota is proposed t o be establ ished for SMEs for allocati on of land in t he I ndustrial Estates and Export Pr ocessing Zones (EPZs). SMEs may be char ged a concessional rate of land (at no pr ofit no l oss basis) as compared to t he c ost offered t o large-scale ent erpr ises.  All public sector procureme nt may enc ourage partici pation of SMEs with certain products/contracts exclusively to be competed amongst the SMEs.  GoP may consider t o support establis hme nt of an SME Pr omotion Counc il (includi ng its l ocal c hapters) and SME speci fic Trade Associati ons for orga nizing SMEs and providi ng the m wit h a platform t o l obby for favourable gover nme nt polic ies.  Governme nt t o ensure adequate provision of physical i nfrastructure (roads, utilities etc.) in existing SME clusters. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  16. 16. SME Policy 2007 16  Capacity buildi ng a nd stre ngt he ni ng of exis ting CCIs and TAs, may be u nder taken, making t hem mor e e ffe ctive for supporti ng t heir m embe rs inc luding SMEs, with special focus on WTO & its im pact on l ocal i ndustry. Moreover, Governme nt functi onaries in tax, registrat ion, labour, etc. departme nts are proposed to under go specialized trai ning for handli ng SME related issues.  Genuine SME representatives are propose d to be i nducted in all fed eral moni tori ng and d ispute resolution schem es with private sector partici pati on.  Regulatory re gime for specialized sectors i n provi nces (such as mining) may be develope d as per their speci fic requireme nts keeping i n view their re gi onal dynamics.  GoP may foll ow an effective strategy to reac h out and communicate wit h SMEs using appr opr iate elec tronic and pri nt media. Re gulatory com plianc e proc edures will be widely commu nicated to SMEs. Communication will increasingly use Urdu & l ocal languages whe r e useful.  Impr oving and e nforc ing I ntellec tual Propert y Rights for SMEs. A vast pool of information, analyses and studies are available that may form the basis for im pleme nti ng t he recommendations on Business Environme nt. Details of additional resources required are annexed. Expected Impact Impleme ntati on of t he rec ommendations for creati ng c onducive ‘Business Environm ent’ for SMEs will result in re ducing the num ber and simpl ifyi ng t he compliance pr ocess of SME regulations. This is expected to trigger fast paced creation and grow th of ent erpr ises resulting in ec onom ic developme nt and job creation. Access to Finance & Related Services Problem Statement According to t he Investment Climate Assessment 2003, banks provide for only 7-8% of t he t otal fundi ng r equirement of SMEs. Also, as per a study by LUMS on ‘ Barriers to SME Growth in Pakistan: An Analysis of Constraints’ , access to fi nance, was ide nti fied by SMEs, as the single most im portant im pe diment t o growth. This problem incr eases in magnitude wi th r eduction i n size and ex pe rience of t he firm. With the pr omul gation of t he P rudential R e gulations for SME Fi nanci ng by SBP, the basic regulatory framework for prom oti ng S MEs’ access to formal fi nanci ng has bee n provided. However, inc reased SME access to fi nanci ng wi ll require interve ntions in all three areas of SME fi nanci ng, i.e., dema nd side (SMEs), supply side (Banks) and intermed iaries and re gulators (SBP, SMEDA, etc). Policy Recommendations  Incorporation of SME fi nanci ng i n t he Annual Cred it Pla n of the SBP and moni tori ng t o cater for underserved segment of the SMEs. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  17. 17. SME Policy 2007 17  Review of Prude ntial R egulations, pe riod ic ally, in li ne with t he SME c redit demand and supply data.  Establishment of Cr edit Guarantee and Cr edit Insurance agencies, operati ng inli ne with sou nd inter nati onal practi ces, to provide incent ives and risk cover for banks, so as to provide them the relevant com fort in fi nanci ng SMEs.  Support t o F Is in designi ng and launchi ng i ndustry based pr ogram-lend ing schemes.  Capacity buildi ng of the CIB t o re port posit ive and ne gative data & shari ng of SME fina ncing data by the SBP.  Impr ovement in t he re gulatory pr ocedures and fiscal i ncentives for Venture Capital c ompa nies.  Intr oduction of Bankruptcy Laws with ded ic ated and effect ive judicial pr ocess.  Expansion i n t he rol e of Banking Ombudsm an to i nclude re dressal pr ocess for SME complaints.  Awareness and promot ion of options for for mal financi ng and good accou nting practices amongst S MEs.  Prom otion of Islamic mod e of fi nanci ng for SMEs. The resource all ocation for im pleme nti ng t he recom mendati ons on im provi ng SMEs’ access to fina nce are annexed. These esti mates, however, may be mod ifi ed once detailed studies are conducted on dema nd and viable size of the credit guarantee, credit i nsurance and ve nture capital fund in Pakistan. Expected Impact It is expec ted t hat im proveme nt i n t he re gul atory framework, pr ovision of s pecialized credit lines and risk sharing schemes for FIs will result in creating an environment where banks will aggressively pursue the opportu nities offered by the SME fi nanci ng market in Pakistan. Impr ovement in t he regulatory a nd fiscal environme nt and provisi on of matc hi ng c ontri bution will resul t in establishment of new ve nture capital compa nies. Both t hese measures will im prove accessibility of startups and existi ng SMEs to formal sources of fina ncing, removing a major barrier t o their growth and developm ent. Supporting Human Resource Development Technology Up-gradation and Marketing Problem Statement The poor nati onal per forma nce on t he Human Development Index of t he UN has its consequences for S MEs in Pakistan. These i nclude i nadequate and ge neric education and insuffi cient, poorly focused and und er-serving trai ning infrastructure. SMEs mostly draw t heir human resource (i ncludi ng t he owners) fr om eit her t he hi ghe r education i nstitutions or the tec hnical traini ng i nfrastructure, bot h of whi ch are not SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  18. 18. SME Policy 2007 18 attuned to t he SME needs nor are t hey e quipped to addr ess them. This situation limits the capacity and ca pability of S MEs to innovate, add value, upgrade te chnology and devise new marketi ng strategies. Adding to these w oes are t he lim ited opt ions available to SMEs to invest in HRD, technol ogy and ex ploration of new markets. As a result, the SME sector i n Pakistan is usually engaged i n l ow value added manufacturing using ine fficie nt labour, outd ated technol ogy and operating i n limi ted and traditional markets. The SME sector neither possesses the financial strengt h nor the c ollect ive wisdom t o cl imb its way out of t his ‘low equilibrium’ e nter prise activity. Public sector i nstituti ons alone can not a dequately provide HR D, technol ogy and marketing support. However, currentl y, the re exists an insufficie nt capacity of t he private sector Business Development Servi ce Provide rs (BDSPs) t o address SME needs and limited demand for such services by SMEs (because of lack of awareness or capacity to pay). Thus concrete and substantial Govt. commitme nt is needed t o establish ‘Islands of Excellence’ in HRD, tec hnol ogy up-gradati on and marketing, wit h strong and active partici pation fr om SME associations and private sector business service providers. Once established, these ‘ Best Practice Models’ will be emulated by the SMEs. Also, strong inc entives need to be provided t o both SMEs; for i nvestment i n HRD, technology and marketing innovati on and to BDSPs to design and pr ovide innovative business developme nt services to SMEs. Policy Recommendations Human Resource Development  Need Assessment Survey to identify major S ME needs in HRD, tec hnol ogy up- gradation and marketi ng.  Establishment of I nstitutes of S mall and Medium Enterpr ise & Entrepre neurshi p Devel opment (INSMED) i n select business schools.  Capacity buildi ng and up- gradation (cur riculum redesign, provision of equipment, teachers traini ng, SME liaison, etc.) of sele cted sect or speci fi c technical trai ning institutes serving in major SME clusters and establis hment of such institutes whe re none exist.  Encouragi ng use of the technical t raini ng i nfrastructure by t he private sector BDSPs serving SME sector and incent ives for i nvestment i n setting up SME training facilities  Induction of ge nuine SME represe ntatives in private sector boards of t he technical training i nstitutes. Technology Up-gradation  Intr oduction of SME specific research projects supporti ng R&D and University-I ndustry liaison programs by M inistry of Scie nce & Technology (MoST), Higher Education Commission ( HEC), Pakistan Software Export Board (PSEB), Ministry of I nfor mation Technol ogy (M oIT) and ot hers.  Establishment of Tec hnol ogy I nnovation Cent ers (TICs) offe ring c ommon facility, tec hnol ogy up- gradation, R&D and d esign r elated services to SMEs. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  19. 19. SME Policy 2007 19  Launchi ng of pilot technol ogy up-gradati on projects for major SME clusters on cost sharing basis.  Ince ntives for I nvestment i n new Emer ging Sectors and Skills upgrade. Marketing  Encourage establ ishme nt of SME sect or specific e xport marketi ng c om panies by pr ovidi ng matc hi ng grants in c onducting inter national marketing research, developi ng marketing strate gies, developing marketing material, packaging, brandi ng, partici pating and c onducti ng trade fairs and undertaking pr om oti onal and marketing activities.  Matching grants for d eveloping ‘world-class’ trade and pr oduct dir ectories for major SME clusters (e.g., Members directory by Pakistan Association of Automotive Parts & Accessories Manu facturers )  Establishment of SME quota in t rade dele gations suppor ted by EPB  Com pilati on a nd disseminati on of data on l ocal markets using manufacturers, distributors and retailers data  Provision of support to SME associati ons i n expl oit ing l ocal market opportunities by holding d omestic pr oduct e xhibiti ons  Establishment of Annual SME Awards (on t he li nes of Annual FPPCI Export Trophy Awards) for rec ognizing outstandi ng per formance i n d omestic a nd inter national markets, technol ogy i nnovation, HRD pract ices, etc. Resource allocation, time frame a nd im plem e nting age ncies for polic y rec omme ndati on on supporting HRD, tec hnol ogy up gradation and marketi ng are annexed. Expected Impact It is ex pected that e ffective im plem entati on of Pol icy rec omme ndati ons i n supporting HRD, tec hnol ogy up- gradation and marketi ng will create a human resource pool and necessary infrastructure for addi ng value to SME businesses by tec hnol ogy up- gradation and i nnovative marketing. It will a lso i ncrease r ole of private sector BDSPs in serving t he SME sect or i n undertaking business development activities. Entrepreneurship Development Problem Statement Pakistan is a society of ‘employ ees’. The education and social system does not encourage entrepreneurship as a pre ferr ed career opti on am ongst t he yout h. Entrepre neurshi p is usually undertaken by those bel onging t o the existing business families. As a result t he ec onom y wit nesses a small number of ne w e nter prises being SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  20. 20. SME Policy 2007 20 created and t hat too i n traditi onal areas of business overcrowdi ng the supply /pr oduct base and their markets. On the other ha nd, there are no limitati ons in the ent repreneurial capa bilities i n t he populace. If, t his e ntre pre neurial pote ntial can be unl eashed, by pr ovidi ng level playing field, information, awareness and support i n establis hing e nter prises, Pakistan can wit ness fast paced gr owth i n establis hment of ne w e nter prises creati ng new empl oyme nt opportuni ties, improvi ng dist ribution of wealth and ex pl oiti ng t he opportunities offer ed by internati onal markets in t he li beralized WTO re gime. The past Government programs to enc ourage entre pre neurshi p such as Self Employme nt Sc heme, Youth I nvestment Pr omot ion Society and Yell ow Cab Sc heme were limit ed and not too c omprehe nsivel y designed and t hus achieved lit tle i n prom oti ng e ntre pre neurshi p amongst t he e d ucated Pakistani yout h. There is a need for G ovt. to actively prom ote entr epre neurship thr ough changes in education curricula, by creati ng awareness amongst y outh and by pr oviding e ffective support t o those w ho wish t o establish new e nter prises. Policy Recommendations  Revision i n pr imary and higher educ ation curricula for promoti ng entre pre neurshi p amongst t he educated y out h  Inclusion of ‘Entre pre neurshi p’ courses in (all pr ofessional de gree awardi ng) higher education, t echnical and vocational tr aining i nstitutions in Pakistan  Entrepre neurshi p Compe titi ons at university level t o culmi nate i n Annual Entrepre neurshi p Com petiti on at National level for selecti ng best business plans/models and pr oviding grant for pr ojec t implem entati on  Establishment of tec hnol ogy and business incubators in selected u niversities in Pakistan  Identi ficati on of i nvestment opportuniti es offered by backward and forwar d linkages of successful services/pr oducts Expected Impact Impleme ntati on of t he rec omme ndati ons on support ing e ntre pre neurship amongst t he Pakistani youth will result in larger segments of the educated populati on taking interest i n establ ishi ng t heir ow n businesses and some wi ll eventually i mplem ent the ir ideas. As a result, a fast increase may be wit nessed in ente rpr ise creation t hus adding jobs t o t he ec onomy a nd im pr oving income distributions. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  21. 21. SME Policy 2007 21 Section IV SME Policy – Implementation and Resource Allocation SME Policy – Ownership and Implementation A large number of G overnme nt Ministr ies and orga nizations (in additi on to the private sector) will have to play the ir role in removi ng im pedi ments and providi ng support for SME growt h. There fore, it is im perative that t he SME P olicy is appr oved by t he Prime Minister and end orsed by all Provi ncial G overnm ents. Such support coupled with clear de fini tion of responsi bil ities of various Governm ent i nstituti ons will pr ovide t he required pol icy vehic le for prom oti ng SME led ec onomic gr owt h in Pakistan. SME Policy – Investment and Expected Impact The SME Policy also presents the estimates of pu blic and private sector i nvestments for im pleme ntation of t he policy rec omme nd ations and e nvisages be ne fits i n te rms of enter prise grow th, j ob creation and poverty r eduction. Summary of Estimated Resource Allocation The proposed resource allocation for impl e menti ng t he SME Policy is summarized as below. However, the estimates may be revise d once detaile d im pleme ntation plans are develope d and t he studies ( proposed in this document ) have been conducted: E s ti mate d Sr. No. The mati c A re a Re s ourc e A lloc ati on (Rs . Mi lli on) 1. SME De f i ni ti on, F ee dbac k , Moni tori ng & E v al u ati on 2 7 .6 Me c hani sm 2. Bu si ne ss E nv i ronme nt 355 3. Ac c e ss to F i nanc e & Se rv ic e s 7736 4. Su pporti ng Hu man Re sou rc e De v el opme nt, T e c hnol ogy U p 5010 gradati on Mark e ti ng & E ntre pre ne u rshi p De v el opme nt Total 1 3 ,1 28 .6 SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  22. 22. SM E Polic y I mple me ntati on Plan Propos e d Pri nc i pal i mple me nti ng E s ti mate d Jan - Mar Apr - Jun Jul - Sep Oct - Dec Jan - Mar Apr - Jun July - Sep Oct - Dec Jan - Mar Apr - Jun July - Sep Oct - Dec I ns ti tutions /Tas ks A g e nc ie s Re s ourc e Re qui re me nt (PKR M i lli on) 2007 2008 2009 SM E Polic y – A pproval Fe de ral Cabi ne t / f rom Cabi ne t M oI P& SI 1 . SM E Fee dbac k, M oni tori ng & E valuati on 2 7 .6 0 1 .1 SME Database SME DA De v e l opme nt 1 .2 SME Base l i ne Su rv e y SME DA 2 . Bus i ne ss E nvi ronme nt 3 5 5 .00 2 .1 Approv al & SME DA/MoIP & SI/Mo P romu l gati on of SME Law, Ju sti c e & Hu man Ac t 2 0 0 7 Ri ghts/P arl i ame nt 2 .2 E stabl i shme nt of SME DA/MoIP & SI / TAs / SME P romoti on C ou nc i l C C Is 2 .3 E stabl i shme nt of SME DA/C C Is/TAs SME Ce rti f ic ati on P roc e ss 3 . Ac c es s to Fi nanc e & Re late d Se rvi c e s 7 ,7 3 6 .0 0 3 .1 E stabl i shme nt of SBP /SME DA/ MoF / C re di t Gu arante e Fu nds MoIP & SI 3 .2 E stabl i shme nt of SBP /SME DA/ MoF / C re di t Insu ranc e MoIP & SI 4 . Ac c es s to Re sourc e s & Se rvi c es 5 ,0 1 0 .0 0 4 .1 E stabl i sh Insti tu te s SME DA/HE C / MoIP& SI/ of Smal l & Me di u m NAVTE C / E nte rpri se & TU SDE C / E ntre pre ne u rshi p MoST/U ni v e rsi ti e s De v e l opme nt (INSME D) 4 .2 SME Su bc ontrac ti ng SME DA/MoIP & SI E xc hange 4 .3 Bu si ne ss Su pport MoF / F u nd MoIP & SI 4 .4 C ompe ti ti v e ne ss MoF /MoIP & SI Su pport F u nd E s ti mate d Total 1 3 ,1 28 .6 0 The ti me li ne de ve lope d i s s ubje c t to the approval of G ove rnme nt of Paki s tan & avai lability of ade quate re s ourc e s f or i mple me ntati on.
  23. 23. Section V - Monitoring, Evaluation, and Continuous Improvement of Policy Monitoring and Evaluation In order to i ncrease t he quality and quantity of i nformati on available on the developm ent of ent erpr ises in Pakistan id entical standards have t o be used for classifying e nter prises. The size classification suggested in t his Policy d ocument becomes a mi nimum standard for all organi zations i n Pakistan w hic h are monit ori ng enter prise devel opment and/ or administering support to e nter prises. All orga nizations need to be able t o aggregate and disaggre gate the ir data according t o these size standards. The appli cation of t he measures under t he Policy w hic h draw, direct ly or ind irectly, on public funds, Fed eral, Provi ncial, and Local, will be conti nuously m onitor ed and evaluated so as to permit conti nuous impr ovement. All orga nizations, at National, Provinc ial, and Local levels, whic h are involved in the administrati on of suppor t measures to enterprises, bot h facil itators and providers, will monit or the per forma nce by c ollecti ng at least the foll owi ng infor mati on: b.1 Number of mi cro, small, and med ium ent erprises served b.2 Gender of ow ners b.3 Major sectors of enterprise activity (ISI C) b.4 Levels of satisfaction re corde d b.5 Feedback received b.6 Total cost of service (dir ect a nd i ndire c t) i n PKR per be ne ficiary enter prise b.7 Total be ne fit of service i n ter ms of em pl oyment, growth and i nc ome (during service and after service) per be nefi c iary enter prise The or ganization of t he monit ori ng and evaluation system, includi ng t he aggre gation and analysis of the information will be unde rtaken by SMEDA. SMEDA will provide cons olidated re ports on ent erpr ise development as well as on the impleme ntati on of enter prise support u nder t his Pol icy on a semi-annual basis to the National Comm ittee on Small and M edium Enter prise s (NCSME). SMEDA will also prepare an Annual Report on SME Devel opm ent to be pr esented to t he Parliame nt by the Minister for Industries, Production and Spec ial Initiatives. Continuous Improvement of Policy Moni tori ng and evaluation results will be used by all stakeholders t o conti nuously impr ove the existing policy and the spec ifi c measures taken. Moreover SME Surveys shall be und ertaken peri odically t o assess the impact of i nterve nti ons made and target support mecha nisms wher e required.
  24. 24. SME Policy 2007 24 Coordination National Committee on Small and Medium Enterprises (NCSMEs) The Minister for I ndustries, Producti on & Special Ini tiatives shall chair the semi- annual meetings of the Nati onal Commi t tee on Small and Me dium Enterprises (NCSMEs). This Committee will review the implem entati on of Small and M edium Enterprise Pol icy, and d ecide w hic h shape speci fic measures for ente rpris e developm ent wil l take and how existing me asures need to be adjusted in line wit h developm ents a nd i n the i nterest of c ontinuous impr ovement. T he Committee will also serve as a mechanism to impr ove coordination be twee n differe nt stakeholde rs and resolve differe nces whi ch may exist be t ween t hem. SMEDA will functi on as the Secretariat to the Committ ee. Members of NCSMEs Members of t he Nati onal Comm ittee on Sm all and Medium Enter prises are; Minister for I ndustries, Producti on and S pecial I ni tiatives, Minister of State for Fina nce, Minister of State for Ec onomic Affairs, Deputy Chairman Planning Com mission, Provinc ial Ministers for Industries, Governor of t he State Bank of Pakistan, Chairman Ce ntral Board of Revenue, Chairm an Securities & Excha nge Commission of Pakistan, Federal Secretary for Industries, Producti on & S pecial I nitiatives, Federal Secretary Comme rce, Federal S ecretary for Labor, Manpow er and Overseas Pakistanis, Federal Secretary for Statistics, Federal Secretary for Education, Federal Secre tary for Science a nd Technol ogy, Federal Secretary for Wom en Devel opment, Preside nt of FPCCI, Presidents of Karachi, Lahore, Sarhad & Quetta Chambers of Commer ce & Industry and Presidents of small and medium enter prise Business Membership Organizations (BMOs). The Gover nme nt in consultation wit h FP CCI will appoi nt five r eprese ntatives of Cham bers of Commerce a nd Industry re pres enti ng pred omi nantly SME sect or. Three represe ntatives of small and medium e nter prise business membershi p or ganizations shall also be m embe rs of the said Committe e . The Commit tee may co- opt furthe r Mem ber s as it sees fit to address speci fic issues and ensure r eprese ntation of small and me dium ente rprise int erests. Similarly, t he Governme nt may add or re move mem bers of the Com mittee as it d eems fi t. Provincial Committees on Small and Medium Enterprises (PCSMEs) The Chie f Executive of eac h Pr ovince wi ll chair t he m eeti ngs of the Provi ncial Comm ittees for Small and Medium Ent erprises (PCSMEs) pe riod ically. These Comm ittees will support t he National Com mittee on Small and Medium Enter prises (NCSMEs) by assembli ng expertise fr om all fiel ds as necessary i n order to pr epare, develop, and im pr ove Small and Medium Enterprise P olicy, i ncluding but not limite d to speci fic support measures and impr ovem ents in t he e nabli ng envir onment. It will prepare r ecomm endati ons for a ppr oval by N CSMEs as necessary. SMEDA Provincial Offices wil l fu ncti on as t he Secr etariat to each of t he P rovi ncial Commit tees. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan
  25. 25. SME Policy 2007 25 Members of PCSMEs Members of the Pr ovincial Committees of Small & Medium Enterprises shall be decided by t he Chie f Executive of each Pr ovi nce. SMEDA - Ministry of Industries, Production & Special Initiatives, Government of Pakistan