Better business regulation sought for SMEs

Islamabad:The small and medium enterprises need enabling policy measures to recover from losses caused by coronavirus pandemic, say economic experts.

According to them, the provincial governments should also evaluate the situation to respond with urgent facilitation to save such business. These experts and analysts on the economy from public and private sectors were engaged by the Sustainable Development Policy Institute in an online dialogue on ‘Better business regulation for SME sector in Punjab province’ here.

Director (Projects and Policy), Punjab Board of Investment and Trade Sohail Qadiri said his institution was aiming to create a buying house platform for the capacity building services to SMEs and to help them in exploring global markets. He suggested that the institutions such as Small and Medium Enterprise Development Authority (SMEDA) and Punjab Small Industries Corporation (PSIC) collaborate and help SMEs to mitigate COVID-19 related difficulties.

"The needs of SMEs should also be prioritized in the relevant policies and efforts so that more clusters of smaller firms could be created," he said. SDPI Joint Executive Director Dr Vaqar Ahmed, who moderated the discussion, said it was need of the hour for the SECP to ease laws for SMEs and startups across the country.

He said the current laws were preventing idle liquidity in the economy to move from real estate to investments in innovative firms. Dr Vaqar said Pakistani diaspora, willing to invest in Pakistan, continued to complain of lack of credible venture capital and crowdsourcing framework.

"The Security Exchange Commission of Pakistan needs to evaluate the existing facilitation and regulatory framework. An evaluation is also desired to see if anticipated gains from SECP’s startup portal, facilitation desk and regulatory Sandbox initiatives are achieved," he said. The SDPI JED called for a deeper consultation with private sector and think tanks around amendments to the private equity and venture capital regulatory framework.

He said the provincial government also needed to study the rise in business costs related to compliance with COVID-19 related SOPs. Founding president of the Women Chamber of Commerce and Industry Lahore division Dr Shehla Javed Akram said there was a lack of interest on the part of the government to engage businesses and understand their issues.

She said the women-led businesses even find it more difficult to access the refinance facility and collateral-free loan facility announced by the State Bank of Pakistan and likewise, the commercial banks don’t understand the problems faced by women-led SMEs.

"The Punjab government needs to learn from peer economies and how they have supported SMEs, particularly women-led businesses. The central banks in other countries have been more innovative in launching support schemes for women-led enterprises."

Kamran Niazi of the USAID highlighted the need to unpack which SMEs need more support in COVID-19 times. "The provincial governments should study how to integrate rural SMEs with major markets in mainstream cities and urban centers in a better manner. Moreover, e-commerce policy and interventions should be customised to bring consumers from rural areas online," he said.

Niazi said the donor organisations trying to help Pakistan faced difficulties as they couldn't plan their support better in the absence of timely and credible data on SMEs.

Ammara Farooq Malik, a social entrepreneur, lamented that no assessment had been made yet on how coronavirus had impacted social enterprises across the country.

"In this sector, several women work from home or online, but they have not been supported through any intervention by Punjab government. The country is in dire need of a legal framework for social enterprises," she said.

SDPI researcher Hassan Murtaza called for the capacity building of SMEs to explore various new markets.

Ahad Nazir of the Center for Private Sector Engagement, SDPI, highlighted various aspects of the current pandemic-induced crises and said around seven million people could be affected if SMEs were faced with prolonged impacts of the pandemic. He said right policy measures were required to revive such businesses. "SMEs in Punjab also wish to see how they will benefit from the ongoing implementation of CPEC projects and what are the future opportunities in engagement with China," he said.