The Small and Medium Enterprises Development Authority (Smeda), as per directives of Federal Minister for Industries Rana Tanveer Hussain and Federal Minister for Finance Muhammad Aurangzeb, has launched a move to make SMEs bankable in a bid to provide easy and increased access to finance.

As a first step in this regard, Smeda inked a memorandum of understanding (MoU) with Askari Bank on Wednesday. The MoU was signed by Smeda CEO Socrat Aman Rana and Askari Bank Country Head-SME Division Hussain Ali Haider.

Smeda CEO said the government was committed to making the SMEs bankable for enhancing their access to state financing schemes and specialised financial products.

“Despite the higher significance of SMEs in job creation, innovation and economic diversification, private sector lending to them had declined from 8.5% to 6% over the past five years, with the total outstanding portfolio stagnant at Rs543 billion,” he revealed.

The CEO was confident that the plan being evolved by Smeda, in collaboration with the banking industry, would significantly enhance private-sector lending to the SMEs.

According to the MoU, Smeda will utilise its regional offices and help desks for disseminating information and creating awareness of the concessionary government financing schemes and Askari Bank SME products.

In addition, Smeda will extend its capacity-building initiatives for the SMEs in business development, such as accounting and bookkeeping, marketing, technical advice, etc. The SMEs, approaching Smeda help desks, will be facilitated in the application process for government financing schemes. Smeda will also share research studies that are of interest to the bank.