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    SMEDA

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    SME:(SMALL AND MEDIUM ENTERPRISES)

    Small and medium enterprises (also SMEs, small and medium businesses, SMBs,

    and variations thereof) are companies whose headcount or turnover falls below certain limits.

    The abbreviation SME occurs commonly in the European Union and in international

    organizations, such as the World Bank, the United Nations and the WTO. The term small and

    medium businesses or SMBs is predominantly used in the USA.

    SMEDASMEDEFINITION

    Small & Medium Enterprises are defined as follows, as approved in SME Policy 2007

    Enterprise CategoryEmployment Size

    (a)

    Paid Up Capital

    (b)Annual Sales (c)

    Small & Medium Enterprise

    (SME)Up to 250

    Up to Rs. 25

    Million

    Up to Rs. 250

    Million

    The Federal Government, in line with the economic development of Pakistan may, from time to

    time modify the eligibility criteria as it sees fit. All providers of services receiving funding from

    the Government may define more narrow scopes for specific targeting purposes.

    SMEDEFINITIONS USED BY VARIOUS INSTITUTIONS IN PAKISTAN

    Institution Small Medium

    SME Bank Total Assets of Rs. 20 millionTotal Assets of Rs. 100

    million

    Federal Bureau of

    StatisticsLess than 10 employees N/A

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    Punjab Small Industries

    Corporation

    Fixed investment. up to Rs. 20 million

    excluding land and buildingN/A

    Punjab Industries

    Department

    Fixed assets with Rs. 10 million excluding cost of land

    Sindh Industries

    Department

    Entity engaged in handicrafts or manufacturing of consumer or

    producer goods with fixed capital investment up to Rs.10 million

    including land & building

    State Bank of Pakistan

    (SME Prudential

    Regulations)

    An entity , ideally not being a public limited company, which does not

    employee more than 250 persons ( manufacturing) and 50 persons

    (trade / services) and also fulfills one of the following criteria:

    (i) A trade / services concern with total assets at cost excluding land andbuildings up to Rs 50 million.

    (ii) A manufacturing concern with total assets at cost excluding land

    and building up to Rs 100 million.

    (iii) Any concern (trade, services or manufacturing) with net sales not

    exceeding Rs 300 million as per latest financial statements.

    WHAT IS SMEDA:(The Small And Medium Enterprises Development Authority)

    Premier institution of the Govt. of Pakistan under Ministry of Industries and Production,

    SMEDA was established in October 1998 to take on the challenge of developing Small &

    Medium Enterprises (SMEs) in Pakistan. With a futuristic approach and professional

    management structure it has focus on providing an enabling environment and business

    development services to small and medium enterprises. SMEDA is not only an SME policy

    advisory body for the government of Pakistan but also facilitates other stakeholders in addressing

    their SME development agendas.

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    SMEDAVISION

    "Growth of globally competitive SME sector, through a conducive environment and support

    services, serving as an engine of sustainable growth for national economy"

    MISSION STATEMENT

    To function as the promoter & facilitator of SME sector in Pakistan by creating a conducive and

    facilitating environment as well as providing and facilitating service delivery to SMEs

    for enhancing their capacities and competitiveness.

    SMEDAOBJECTIVES

    1. Formulate Policy to encourage the growth of SMEs in the country and to advise theGovernment on fiscal and monetary issues related to SMEs.

    2. Facilitation of Business Development Services to SMEs.3. Facilitate the development and strengthening of SME representative bodies

    associations/chambers.

    4. Set up and manage a service providers database including machinery and supplier forSMEs.

    5. Conducting sector studies and analysis for sector development strategies.6. Facilitation of SMEs in securing financing.7. Strengthening of SMEs by conducting and facilitating seminars, workshops and training

    programs.

    8. Donor assistances for SME development of SMEs through programs and projects.9. Assist SMEs in getting international certifications (such as UL, CE, DIN, JIS, ASME,

    KS, etc.) for their products and processes.

    10.Identification of service opportunities on the basis of supply/demand gap.

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    11. Brief history of SMEDAGovernment of Nawaz Sharif established Small and Medium Enterprises Development

    Authority in late 1998 with great fanfare and pledged to provide Rs. 250 billion for Small

    12.and Medium Enterprises (SMEs) in three years. But there had practically been noinvestment in the small and cottage industries since the establishment of SMEDA.

    It is established to take on the challenge of developing Small & Medium Enterprises (SMEs) in

    Pakistan. SMEDA is relatively a new organization with a futuristic structure and focus on

    providing business development services to small and medium enterprises. SMEDA is not only

    an SME policy-advisory body for the government of Pakistan but also acts as a one-stop-shop for

    its SME clients.

    SMEDA Structure

    Under the Federal Ministry of Industries & Production, SMEDA is headed by a Chief Executive

    Officer who is a public appointment; a senior federal public official from the Federal Public

    Service Commission of the Government of Pakistan who directly reports to the Federal Secretary

    for Industries & Production.

    The Organization is divided in to four divisions on functional basis that are Central Support

    Division, Policy & Planning Division, Out Reach Division, and Business & Sector Development

    Service Division. Each division is headed by a General Manager directly reporting to the CEO.

    The General Managers, in most cases, are also senior federal public officials from the Federal

    Public Service Commission. The middle and frontline management are hired from the private

    sector on two year contract basis.

    The Central Support Division include support departments like Human Resource,

    Administration, Account, PR & Marketing, MIS/IT, with an exception of Donor Coordination &

    International Linkages department which is responsible for developing and facilitation of

    International linkages and donor involvement in the country on SME development level.

    Policy & Planning division is the research organ of the organization further divided into

    Research wing, Planning & Development wing and Policy development wing.

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    SMEDA has a country wide out reach with four main regional offices each headed by a

    Provincial Chief for each of the four provinces of Pakistan i.e. Punjab, Sindh, Balochistan and

    North West Frontier Province these are further extended to 23 major cities of the country with a

    one-man office housed in prominent Chambers of Commerce & Industry which are called

    Regional Business Coordinators. The Outreach Division also includes Industry Support Cell and

    Training Services Department which is responsible for providing training services to SMEs.

    Business & Sector Development Service Division works to extend various consultancy services

    such as Financial, Legal, Technical & Innovation, and Sector development. This division also

    houses the E-Services that SMEDA provides and the Industrial Information Network

    Achievements

    SMEDA has so far successfully formulated strategies for sectors including, dairy & livestock,

    marble and granite, gems and jewellery, marine fisheries, leather and footwear, textiles, surgical

    instruments, and transport. Over the period Government of Pakistan has incorporated separate

    agencies to take on the preliminary work done by SMEDA in various sectors. A number of

    independent sectoral development bodies have been created through SMEDA initiatives.

    Consequently, Pakistan Horticulture Development and Export Board (PHDEB), Pakistan Dairy

    Development Company (PDDC),Pakistan Stone Development Company (PASDEC), PakistanGems & Jewellery Development Company (PGJDC), Technical Upgradation & Skills

    Development Company (TUSDEC) has already started their operations. Whereas the task of

    SME development at a broader scale still requires more coverage and enhanced reach in terms of

    SMEDAs areas of operation.

    Along with the sectoral focus a broad spectrum of business development services are also offered

    to the SMEs by SMEDA. These services include identification of viable business opportunities

    for potential investors. In order to facilitate these investors, SMEDA provides business guidance

    through its help desk services as well as development of project specific documents. These

    documents consist of information required to make well-researched investment decisions. Pre-

    feasibility studies and business plan development are some of the services provided to enhance

    the capacity of individual SMEs to exploit viable business opportunities in a better way.

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    According to Economic Census of Pakistan, 2005 by Federal Bureau of Statistics, there are

    70,658 women owned businesses operating across Pakistan. This represents 3% of total

    enterprises in Pakistan. It is estimated that most of the women owned businesses fall within the

    category of SMEs. The level of women participating in enterprise development currently is

    around 16%, reason being availability of their limited resources topped by lack of confidence to

    invest in infrastructural facilities. In order to bridge this gap, Government of Pakistan has given

    SMEDA the task of setting of first Women Business Incubation Center (WBIC) which was

    successfully established. This center is addressing the Women specific business development

    needs along with providing then secure space to nurture their business. Hence, it would not only

    provide physical facility but also impart business management training to existing and new

    entrepreneurs.

    In realization of the dire need of a common vision for SMEs to be the real engine of economic

    growth, Prime Minister of Pakistan assigned SMEDA, the uphill task to devise the first ever

    SME Policy of Pakistan. In order to achieve the objective, wide scale consultation has been

    undertaken to elicit views of the ultimate beneficiaries, i.e. SMEs. The participation of

    stakeholders has been therefore, the cornerstone of the policy development process. Federal

    Cabinet, in its meeting on January 17, 2007 has approved the SME Policy. The Prime Minister,

    while approving the Policy stated that it marked advent of a new era of development with the

    long over due recognition of SMEs as a distinct entity and provides the framework & direction

    for SME development in Pakistan.

    SME Clusters in Pakistan have huge potential and critical to SME growth. SMEDA has always

    been fully cognizant of the significance of Cluster Development and has taken several initiatives

    in this regard. These initiatives include Technological Up-gradation, establishment of Common

    Facility Centers(CFCs) , access to Formal Finance for SME clusters, Marketing support,

    Improving HR skills and Awareness on International Certification & Regulations.

    Foreseeing the emerging importance of web interface as a tool to provide information excess and

    capacity building to business sector in Pakistan, Ministry of Industries & Production has joined

    hands with Ministry of Information Technology and Telecommunication to launch first ever

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    Business to Business (B2B) and information portal in Pakistan; the Industrial Information

    Network (IIN).

    SME Sector in Pakistan 3.2 million business units in PakistanOver 99% business units employ

    less than 99 persons.Generate 78% of non-agri sector employment

    Direct Contribution to GDP over 30% Generate 25% of Manufacturing Export Earnings

    Contribute 35% in Manufacturing Value addition.International Linkages & Collaboration

    SMEDA also aggressively works to develop international linkages with other countries &

    international donor agencies. SMEDA strives to develop SME Development ties on bilateral and

    multilateral basis with countries around the globe. SMEDA has working relations with over 50

    countries which includes share of information and experiences, business match making for

    investment and joint venture opportunities, support & encouragement of trade fairs Out of these

    over 50 countries, SMEDA has signed Memorandum of Understanding with 9 countries with its

    counterpart agencies, these include China, Poland, Turkey, Morocco, Tunisia, Algeria,

    Mauritius, Kuwait, and Uzbekistan. SMEDA oversees efforts

    SMEDA has also developed strong working ties with a number of international donor agencies

    who are involved in the economic development of Pakistan. This collaboration generally

    includes financial and technical assistance to the SME sector of Pakistan. These agencies include

    JICA, UNIDO, UNDP, World Bank, Asian Development Bank, USAID, SES, GTZ etc.

    SMEDA in collaboration with JICA (Japan International Cooperation Agency) has initiated an

    Industry Support Program in Pakistan.

    The present government's emphasis on development of small and medium scale enterprises in the

    private sector is being duly appreciated by the donor countries. Japan, European Union, Italian

    government and Asian Development Bank have shown keen interest in the various projects

    identified by Small and Medium Enterprises Development Authority (SMEDA) of Pakistan.

    Our FindingsRecently, in Pakistan hundreds of businesses have been closed due to shortage of

    Electricity, water, Sui gas (natural gas), or due to law and order situation (like assassination of

    Ex-Prime Minister of Pakistan Benazir Bhutto in Rawalpindi).

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    every day million of assets are being transferred to Gulf countries by existing business

    community, in such a scenario no SME can prevail and grow with reasonable level of certainty.

    recommendationMoreover, economically, this policy is viable but not focused for some

    excellence sectors in future, like a widely acclaimed adopted one village, one product model for

    microfinance and SMEs, this policy shall be focused on some specific businesses and product

    lines, instead of forming a mass of unplanned and less cost-effective SMEs, in today world of

    globalization and specialization

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    REFERENCES:

    1. www.slideshare.net/abdullahnayyab/smeda-34625122. http://www.smeda.org.pk/main.php?id=23. http://en.wikipedia.org/wiki/Pakistan_Small_and_Medium_Enterprise_Development_Aut

    hority