MGT601

SME MANAGEMENT
Lesson 07

Government Efforts
Towards SME
Development
Chapter Learning Objectives

This lecture will throw light

on:
 The efforts of government
towards SME development,
 The role of institutions in
public sector.
The efforts of Government towards
SME Development

The government of Pakistan keeping

in view the importance of SMEs has
adopted multi -pronged approaches
at the regional, sub regional and
national levels. Initiatives at the
regional and sub-regional levels
include efforts to strengthen
economic integration and
cooperation.
Continued…….

At the national level;

 Structural adjustment programs
have been in operation along with
attempts at restructuring and
diversifying the production base,
integrating the informal sector into
the economic mainstream and
stimulating the increased
participation at the enterprise level.
Continued…..
Over the years the government has
developed a wide network of
numerous support institutions for
the development of small-scale
enterprise in the country. The
development process was initiated
in the sixties and the concept of
development derived its origin from
the “Indian Model” of small
enterprise development.
Continued…..

The basic idea behind the model is

to develop infrastructure facilities
such as industrial estates, common
facility centers and vocational
training institutes, which would, to a
great extent the problems faced by
the SMEs.
Continued…….

Based on this model numerous

provincial level organizations
were set-up mostly with the help
of foreign assistance in the
shape of grants and soft loans.
Continued…….

Some of these institutions

are which exclusively work
for the small sector and
besides the efforts of the
Government;
Provincial Level Institutions

1. Punjab Small Industries

Corporation (PSIC)
 The PSIC was established in 1972
as an autonomous body for the
promotion and development of the
small-scale industries in the
province.
Punjab Small Industries Corporation…..

The PSIC covers the critical areas of

investment promotion and provision
of credits for setting up new
industries and modernization of the
existing ones. It also promotes the
common facility center, technology
transfer, guidance, handicrafts
development and design facilities.
Punjab Small Industries
Corporation…..

The PSIC also covers;

 Financing and Loans:

PSIC is providing two types of loans

to its clients, working capital and
capital investment loans. The
maximum limit of loan is RS. 7.5
Lac.
Punjab Small Industries
Corporation…..

 Industrial Estates:
PSIC has developed 14 industrial estates
in various areas of the Punjab.
 Services and Programs:
PSIC has also launched “Rural
Industrialization Program” to control
unemployment and strengthen the
marginal household income through
stimulation of industrial growth in the
urban and rural areas of the Punjab.
Punjab Small Industries
Corporation…..

PSIC has established various types

of service centers e.g. metal
industries development center,
Sialkot, Engineering service centers.
Gujranwala, institute of pottery
development, Shahdara etc.
Sindh Small Industries Corporation
(SSIC)

SSIC was established in 1972 having

motives to indulge into promotional
activities of small-scale industries in
Sindh. The objectives of SSIC
include financial assistance,
education of craftsman, census and
survey of cottage and small
industries, procurement and
distribution of raw materials to
artisans and craftsman.
Sindh Small Industries
Corporation….

The SSIC also covers;

Industrial Estates and Colonies:
The SSIC has established 17
industrial estates in Sindh. Total
number of plots developed there are
1938 and there are 302 units
working utilizing 571 plots. There
are six different craftsman colonies
established having 92 shops.
Sindh Small Industries
Corporation….

Financing Schemes:
In October 1992, a self-
employment scheme was started for
locally manufactured machinery
(LMM). The loan ceiling is 1 million
with the markup rate of 14%. The
total amount disbursed to 171 units
is rupees 98 million.
Small Industries Development Board
(SIDB) Khyber Pakhtunkhwa

The SIDP was established in

1972. The SIDB is an
autonomous body, focusing on
manpower training, model
projects and industrial
infrastructure. It has 14 regional
offices in the different cities of
KP.
Small Industries Development Board
(SIDB) Khyber Pakhtunkhwa…..

The SSIC covers;

 Training Centers

 Development Programs and

Model Projects
 Industrial Estates

 Financial Assistance
Directorate of Industries
(Balochistan)

The directorate of industries was

formed in 1976 and it looks after all
the promotional schemes for SMEs.
Further more, the directorate is also
involved in providing various kinds
of advisory and consultancy
services.
Directorate of Industries
(Balochistan)…..

Training Centers:
 The directorate operates sixty-three
training centers in various trades, one
service center, 5 sales and display shops
and one small-industries estate. Of the 63
training centers, about third are carpet
centers, seven are embroidery centers
and the others cover areas like tailoring,
wood work, marble work, mazri and
durree production.
Financial Institutions

Financial sector organizations

also are of great importance to
the SME development in the
country. The government has
also established some
institutions, which cater to the
financing needs of the small
firms.
Financial Institutions……

 Small Business Finance Corporation

(SBFC)
 Youth Investment Promotion
Scheme (YIPS)
 Regional Development Finance
Corporation (RDFC)
 Industrial Development Bank of
Pakistan (IDBP)
 Thanks you
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