Banks’ lending to small and medium enterprises constitute only 8.7 per cent of their total lending to private sector businesses, data till the end of June 2021 of the State Bank of Pakistan reveals. This betrays all the tall claims that successive governments and the central bank have been making for well over a decade about their ‘innovative efforts’ to promote small and medium enterprises (SMEs). The SBP has now introduced a new innovative SME Asaan (easy) Finance Scheme (Saaf) to improve access to finance for SMEs in collaboration with the Government of Pakistan. The government and the SBP keep rolling out new schemes after schemes to help ease the financial hardships of the SME sector without telling the nation what happened with the previous schemes. People’s expectations from the central bank are limited. They expect that SBP will ensure easier access to finance for SMEs and will tell the nation occasionally what went wrong with the implementation of its previous schemes. They expect the government should play a much larger role. It is the government’s responsibility to help organise the entire SME sector, address their structural issues and make them creditworthy for banks. Besides, the government is also expected to implement its pro-SMEs policies, just like any other policy, transparently with accountability. Expansion in e-commerce and IT-ES can only prove conducive towards economic growth if the manufacturing sector continues to grow simultaneously Small and...
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