Measures to help SMEs imperative: experts

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ISLAMABAD (DNA) – The business regulatory environment for small & medium enterprises (SMEs) needs to be improved through appropriate measures to enable them to cope with the unprecedented challengers posed by Covid19. This agreed notion was shared by the stakeholders during online public-private dialogue ‘Better business regulatory environment for SME sector in Pakistan’ organized by the Sustainable Development Policy Institute (SDPI), here on Wednesday.

The participants on the occasion noted that measures are required beyond the short-term relief which may be announced in Federal Budget for the year 2020-21 and take a medium to longer term view of difficulties faced by small enterprises.

Mr Mukesh Kumar, Provincial Head of SMEDA, Sindh, was of view that as the ways of doing business are changing fast as a result of Covid-19, we need to come up with the responses that may meet the requirements of the diverse kinds of enterprises. He said that some micro and small businesses may be in need of loans but for others we may need to give one-off grants to help them stand back on their feet. Moreover, the regulatory requirements may be eased and digitized as per provincial and local level laws, he added.

Dr Vaqar Ahmed, Joint Executive Director, SDPI, while sharing the latest research conducted by his institute, said that about 1.4 million SMEs may face 50% decline in their income and 3 million SMEs in Pakistan may need assistance in after Covid19 scenario. He said that almost 9.5 million of non-agricultural jobs are at risk. According to another research, he said, , 58% SMEs had already laid off employees whereas  47% had reduced employee salaries. Besides, women-led enterprises have reported 61% reduction in their revenue forecast for April – June 2020.

He further said that SDPI research shows that small businesses will need support beyond the credit facilitation recently announced. As costs related to compliance with social distancing and health related SOPs increase, firms need support towards deferment of utility bills for next quarter and support in digitizing production, marketing & distribution. The reduction in customs duties and other trade taxes should be ensured, especially, on the import of health-related equipment. Besides, the regulatory Modernization Initiative can help in reducing number of regulatory steps and costs faced by businesses, he concluded.

Mr Amir Qureshi, representing Habib Bank Limited (HBL), highlighted that the banks will need to develop non-conventional ways of evaluating risks and improve delivery of refinance schemes. Mr  Asif Cheema of Asian Development Bank informed the participants that his institution was helping the government to improve credit guarantee schemes, and put in place a risk mitigation fund.

Mr Ibrahim Kasumbi of Karachi Chamber of Commerce & Industry (KCCI), said that FBR should revisit its tax regime for micro and small enterprises. Ms Shaista Ayesha from SEED Ventures, was of view that business associations are weak and need support. Women-led businesses face barriers which need special attention by all regulatory bodies. Therefore, more flexible financial products for the smallest enterprises need to be developed, she said.

Barrister Ahmed Bashir, on the occasion said that Securities & Exchange Commission of Pakistan (SECP) should provide a legal framework for social businesses. The speakers including  Ather Naqvi, Senior Journalist and Ms Shereen Naqvi, representing School of Leadership also highlighted various aspects of emerging situation related to SMEs in Pakistan.