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Small and Medium Enterprise Development Authority

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Small and Medium Enterprises Development Authority (SMEDA)

In 2002 President of Pakistan promulgated a Presidential Ordinance (No. XXXIX OF 2002) for the assortment of the Small and Medium Enterprises Development Authority as an autonomous body under the Federal Government of Pakistan for encouraging and facilitating the development and growth of small and medium enterprises in the country.

SME definition

SMEDA defines Small & Medium Enterprises, as approved in SME Policy 2007, as an enterprise that has up to 250 employees, or a paid up capital of 25 Million PK Rupees, or an annual sale of up to 250 Million PK Rupees. 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.

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.

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

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), Pakistan Gems & 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 SMEDA’s areas of operation.

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.

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


International Linkages and Collaboration

As the premium SME Development agency in Pakistan under the Federal Government, 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. The organization has working relations with over 50 countries on different levels of collaboration which includes, but not limited to, share of information and experiences, business matchmaking for investment and joint venture opportunities, support & encouragement of trade fairs and business events, and facilitation of inward and outward trade delegations. 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 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 two organizations are working together to provide technical assistance to various industrial sectors through Japanese Senior Experts. Textiles being the most vital sector of our economy was selected to start with for providing support to this industry with the modern techniques, methodology and effective management systems, and to cope up with the challenge of post WTO regime. In this regard, five textile experts of JICA have worked for two years as Senior Volunteers (SVs) at SMEDA and revamped around 166 Textile units. Currently SMEDA’s own team is following-up the project; however efforts are underway to acquire more experts in furniture, fisheries and various other projects.

In order to meet the goal of reducing poverty and expand non-farm economic opportunities in addition to agriculture in rural areas, Aik Hunar Aik Nagar (AHAN) initiative of the Government of Pakistan has been launched. AHAN is local adoption of Japan’s One Village One Product (OVOP) concept, which is already imitated by Thailand and India. The initiative envisages enabling the rural businesses to access a range of business development services, including appropriate technologies and financial capital. The direct benefits are expected to flow from increased employment and income earning opportunities in the rural areas, particularly for wage earners, women and poor producer groups with potential to engage in a higher level of commercial activity.

SMEDA has also recently established Investment Promotion Unit (IPU) in collaboration with UNIDO under the financial grant and credit facilitation available after an agreement between the Government of Italy and the Government of Pakistan for the development of Pakistani SMEs.

SMEDA is also a model organization of Government of Pakistan’s E-Governance initiatives. Benefited with virtually paper less and dynamic environment as well as highly professional staff, SMEDA envisions furthering synergies to its SME focused efforts and contribute to the economic uplift of economy.

See also

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