‘High costs hinder SME growth’

KARACHI: Higher costs are the main obstacle to the underperformance of small and medium-sized enterprises (SMEs), according to a study released on Friday.

More than 5 million SMEs are operating in Pakistan's manufacturing, trade, and services sectors, but the sector has not reached its optimum potential due to many challenges, according to research from the Association of Chartered Certified Accountants.

The study, titled "SMEs: Business Challenges and Strategic Innovation Opportunities," found that more than 58 percent of SMEs cited higher costs as their top concern, emphasizing the need for effective cost management and innovative financial strategies. The research also provides a roadmap for improving SME productivity, performance, and sustainability in the future.

The SME sector comprises about 90 percent of exclusive private businesses, provides employment to 30 percent of the total workforce, contributes an estimated 40 percent to the annual GDP, and 25 percent to annual exports (with information technology and information technology-enabled services among major exports). This sector plays a vital role in economic growth and poverty reduction.