Micro, SME sector playing positive role in economy uplift

F.P. Report

KARACHI: It is understood that the Micro, Small and Medium Enterprises (SME) sector has played a positive role in the development of Pakistan’s economy. So much so that Pakistan Vision 2025 incorporated a development plan for small businesses, where the SME sector’s growth will contribute towards Pakistan’s GDP, enhanced exports and job opportunities.

Microfinance is an important tool in the poverty reduction, social mobility and national development of a country. Once the sector started to gain focus on an international level, Pakistan also gave importance to establishing a Microfinance sector near the end of 1990s. Pakistan, where agriculture is the largest sector of the economy, is brimming with farmers and small business owners who can take advantage of micro-loans and credits to successfully contribute to the national growth. The microfinance banks and institutions spend more time getting to know the small business owners, understanding their business and goals which creates a personalized and encouraging environment for the borrowers.

As an example, Ijaz Husain runs an embroidery unit where he fulfils orders from famous local brands to do embroidery on unstitched cloth. Few years ago, his business was adversely affected by the excessive load shedding where his machines would remain idle for hours a day. This in turn effected the completion and delivery of his client’s orders.

Aware of Khushhali Microfinance Bank’s offerings, he availed a loan of RS 500,000 to buy a UPS and batteries. The uninterrupted power supply helped him restore his production time to full capacity. Production increased, so did profit. Happy with the successful outcome of taking a micro-loan, Ijaz wishes to expand his business unit further by availing more financial assistance from Khushhali Microfinance Bank in the future.

This story is one example of how microfinance institutions and banks today are working parallel to the SME sector and continue to grow as well alongside the sector in Pakistan. They are essentially providing easy access to finance, especially for the marginalized segment of population, so small business owners can run successful businesses without hindrances.