An analysis of SME Companies

in the Manufacturing sector

 INTRODUCTION

What Are SMEs?

As defined by State Bank of Pakistan. A small
Enterprise (SE) is a business entity which does not
employ more than 50 (including contract
employees) and less than 250 employees. For all
MEs annual sales turnover is over Rs.150
million.Medium Enterprises can be extended
finances over Rs.25 Million to Rs.200 Million.
 SME Manufacturing And Services

Microfinance institutions can be defined

as an organisation that offers financial
services to low income populations.
Almost all give loans to their memberes
and many offer insurance, deposit an
dother services.
 Challenges faced by SME Comapanies in PAKISTAN

1-Diversification of the loan portportfol

2-Boosting the industrialization procprocess.
3-Reducing unemployment.
4-Growth of the export sector.
5-Improving the balance of payment situation.
6-Low loan loss ratio on SME bank deposits banking
services.
 Credit Flows to Pakistan’s Manufacturing
SME Sector

The manufacturing sector is a vital sector of the

economy as well as a catalyst for growth.
In Pakistan, manufacturing is the economy’s
third largest sector, contributing 13.5 percent to
GDP and 14.1 percent to total employment.
Advantages Of SME’s companies in the Manufacturing
Sector against big companies

• They’re closer to their customers.

• They’re more flexible
• They are able to better detect and take
advantage of small market niches
• They can make decisions faster
• It is easier to link the staff to the company
• Communication will be easier
•
 D i s a d va nta ge s o f S M E C o m p a n i e s i n t h e
M a n u fa c t u r i n g s e c to r against big companies

• Lack of innovative financial products

• High investment in government securities
• High transactional cost of serving SMEs
• Banks’ risk-averse approach
• Lack of satisfactory business plans, accounting,
and other information
• Insufficient assets for use as security
• Lack of financial awareness of different banking
sservics_x0000_
Policy
Statement Of SME's
Manufacturing sector
Specific Gains of SME companies in PAKISTAN