UNIVERSIY OF MANAGEMENT &

TECGNOLOGY

Resource person: Mam Naveda Kitchlew

Subject: ORGANIZATIONAL BEHAVIOUR
Assignment No. 1
BBA (H) Section-B, spring 2015

Submitted by
Danish Naeem Khan (13048005086)

SME Sector emerges as Major Bank Defaulter

Small and Medium Enterprises (SMEs) banks plays an important role in Pakistan because SMEs
covers a major portion of Pakistans economy. SMEs appeared to be a major bank defaulter at
the end of December 2014, State Bank of Pakistan reported sectors infection ratio to be 30.5
percent at the end of December 2014. The State Bank of Pakistan and Government is promoting
the SMEs but the sector had shown a high rate of infected loans. Promoting SMEs is a huge OB
opportunity of improving quality and productivity for Pakistan because its major portion of
economy depends upon SMEs as well as SMEs banks will provide general public an opportunity
to open and run their own successful businesses to develop their countries economy. At the end
of December 2014 the total advances of SMEs were PKR 299.3 billion out of which PKR 91.2
billion were Non-Performing loans (NPLs) which makes the sector highly risky for the lenders,
However improvements have been seen in overall sectors of Pakistan as compare to past. State
Bank of Pakistan reported that the corporate sector showed a slight improvement in the infection
ratio which fell from 13.4 percent in 2013 to 13 percent at the end of 2014. Agriculture sector is
not performing very well as far as loans are concerned however State Bank of Pakistan has
reported that the infection ratio has slightly decreased to 12.4 percent at the end of December
2014 as compared to 14 percent in 2013. The consumer sector of Pakistan showed an infection
ratio of 11.6 percent however it improved from 16.3 percent to 10.5 percent in 2013 and
remained same at the end of December 2014. Textile sector improved infection ratio from 26.2
percent in 2013 to 25 percent in December 2014. Cement sector also showed great improvement
from 25.3 percent to 19.5 percent at the end of 2014. Automobile and transportation sector also
improved from 17.2 percent to 13.2 percent. Similarly Electronic sector showed a huge
improvement from 41.3 percent to 16.7 percent at the end of 2014. Promoting SMEs is a big OB
opportunity because it will help Pakistan to improve its GDP as well as it will flourish Pakistans
economy, moreover it will provide people a great opportunity to make their lifestyle better and
developing economy.

1 http://epaper.dawn.com/DetailNews.php?StoryText=19_04_2015_010_006