Karachi: The Union of Small and Medium Enterprises (UNISAME) has called on Haroon Akhtar, the special assistant to Prime Minister Shehbaz Sharif, to address the government's insufficient efforts to support the underprivileged SME sector in Pakistan. The organization urged Akhtar to expedite his plans to enhance SME promotion and development.

Zulfikar Thaver, President of UNISAME, highlighted several issues hindering progress in the SME sector. A significant concern is the limited access to financial resources. SMEs receive only 6-7% of private sector credit, often at high interest rates. This makes formal financing expensive and challenging, forcing many to rely on informal credit systems.

Thaver also pointed to inconsistent government policies and an inadequate business environment. The lack of cohesive reform and weak political commitment have stymied effective SME sector development. Historical tax incentives have not been supported by necessary infrastructure improvements.

Operational costs are another obstacle. SMEs face high input costs and infrastructure deficiencies, including transportation and utilities, which undermine their competitiveness. Furthermore, power shortages exacerbate these challenges.

The sector also suffers from a shortage of skilled labor and entrepreneurial capacity. This limits the ability of SMEs to innovate and compete in the marketplace. Additionally, Pakistani SMEs struggle with low productivity and find it difficult to adapt to international market demands due to technological constraints.

Economic preferences further complicate the landscape. Many potential entrepreneurs favor speculative investments over engaging in productive SME ventures, reflecting a risk-averse mindset.

Government support initiatives, such as the Business Support Fund, have been limited in scope and impact. These measures have not adequately addressed the financial and operational needs of SMEs at scale.

Overall, the SME sector in Pakistan remains underdeveloped due to these financial barriers, policy inadequacies, infrastructural weaknesses, and skill shortages. These challenges create a difficult environment for SMEs to grow and compete effectively.