Covid-19: Pakistan ranks 3rd in govt support for SMEs 

KARACHI: Small and Medium Enterprises Development Authority (SMEDA), Asian Development Bank Institute (ADBI) and Asian Productivity Organisation (APO) listed Pakistan’s 3rd position in government support provided to small and medium enterprises (SMEs) to mitigate the impact of Covid-19 pandemic.

The recently launched survey report titled “Impact of Covid-19 on SMEs conducted on-line by ADBI and APO in other countries from the region including Indonesia, India, Bangladesh, Malaysia, Vietnam, Mongolia and Lao PDR. The online survey was administered in August 2020 and lasted till September 2020 in which 236 SMEs from Pakistan participated.

The majority of enterprises in Pakistan were facing 82% cash flow and 65% raw material shortage. However, 11.44% of SMEs in Pakistan expect their sales revenue to increase as compared to 2019, while 12.29% of respondent enterprises expect their sales revenue to remain the same, findings of the survey revealed.

Among the changes reported in the business environment between February and April 2020, Pakistan was the best performer in the region, in terms of the percentage of enterprises, with only 36.44% of respondents reporting a significant decline in domestic demand.

In comparison, 72.29% of enterprises in Bangladesh, 50% in India, 42.52% in Indonesia and 63.5% in Malaysia reported a significant drop in domestic demand.

In terms of government support provided, the government’s electricity support package played a role in supporting SMEs directly during these trying times with 27% of respondents in Pakistan reporting that they received support through payment of utility bills.

However, respondents in other countries reported different areas of support received, such as new bank loans or deferred payment of bank loans.

Businesses being impacted by the economic crunch due to the debilitating pandemic reported that they require support in payment of utilities, tax exemptions or lower tax rates and rent payment to deal with the impact of Covid-19.

Prime Minister Imran Khan had stressed the importance of promoting small and medium enterprises (SMEs) to improve the economic indicators ‘already on a positive trajectory’. The development came while chairing a meeting of the National Coordination Committee (NCC) on Small and Medium Enterprises in Islamabad.

In this regard, they directed the authorities to achieve the earliest targets set for the promotion of SMEs. The Prime Minister asserted that SMEs were an important component of the economy and their promotion will strengthen the economy and create job opportunities. The meeting was informed that the database of the SMEs was being updated on a priority basis in order to extend timely facilities to them.

It was also disclosed that the process of consultations to extend financial assistance to the small and medium enterprises was underway with all the stakeholders. In this regard, a separate fund for SMEs will also be created.