ISLAMABAD, Oct 24 (INP): Chairman United Insurance Group and industrial expert Mian Shahid has said that some simple steps can unlock the Small and Medium Enterprises (SMEs) potential making Pakistan a developed nation.
Addressing a seminar held here on Friday, Mian Shahid said that SME sector can be improved through government support, research, innovation, development of export industry and entrepreneurial relationships.
He said that lack of infrastructure, inadequate research facilities, lack of sound economic policies and international trade barriers are the factors restraining growth of SMEs.
However, he said, insufficient finances is the main reason impeding SMEs from stepping in the international market.
Many banks in Pakistan would not lend to SMEs against the collateral that the banks in developed nation would happily accept, he said adding that reforming collateral rules can convert many challenges into opportunities by enabling small businesses to get bank loan, line of credit, or overdraft.
Mian Shahid said that small firms cannot afford to go global in absence of bank loans which is helping foreign firms to snatch the market share of the local business.
It has become very important to provide local firms more opportunities to develop and expand beyond the national territories as many foreign businesses are entering in Pakistan, he underlined.
Large and multinational firms face fewer hindrances as compare to medium-sized and small firms, he said and added that many SMEs in Pakistan are more focused on fulfilling orders of foreign buyers with little focus on export management, pushing up demand for products, improving internal strengths, employee commitment, cost minimization, marketing effort, competitive intelligence, R & D, unique strategies or developing a strong network.
The chairman United Insurance Groups said that as compared to the large corporations, small businesses contribute more towards national economic growth but it is suffering from disinterest of the Government and lenders.
Facilitating the small exporters through tariff reduction, provision of cheap loans, promotion of innovation, development of human capital and export incentives could have substantial results otherwise consumers of Pakistani products will continue to shrink worldwide which is not good for economy, he warned.