Islamabad, Small and medium enterprises (SMEs) are highlighted as essential contributors to economic growth, particularly in developing countries like Pakistan, where they form a significant portion of the business landscape and employment. This sector faces multiple challenges that impede its full potential, including complex tax systems and insufficient access to finance.

According to Union of Small and Medium Enterprises, SMEs in Pakistan not only represent about 90% of all private enterprises but also employ 30% of the national workforce, contributing significantly to the gross domestic product (GDP). The World Bank underscores the role of SMEs globally, projecting a need for approximately 600 million jobs by 2030 due to the expanding population. The report stresses the importance of SME development, particularly in emerging markets where these enterprises generate seven out of ten jobs.

In Pakistan, where the unemployment rate is currently estimated at 8.5% by the International Monetary Fund (IMF), up from previous years, and with over 5 million unemployed as per the latest figures, the SME sector's development is seen as crucial for tackling poverty and improving employment rates. However, SMEs encounter numerous obstacles including a lack of unified policy frameworks and regulatory complexities at the national level, as well as a dire need for modernization in technology and training in various business sectors.

The Union of Small and Medium Enterprises, which provided the source information, highlights that despite various credit schemes and facilities introduced by the State Bank of Pakistan, the financial accessibility remains largely inadequate, with the sector receiving only 6-7% of private sector financing. The letter calls for concerted efforts to simplify the tax regime, enhance access to modern technologies, and provide better training and support facilities to foster growth and sustainability in this pivotal sector.