Restructuring, reinforcing of SME Bank of prime importance: UNISAME

June 19, 2022: The Union of Small and Medium Enterprises (UNISAME) has invited the attention of Miftah Ismail federal finance minister to the need to restructure and reinforce the SME Bank without loss of time for the benefit of the neglected underprivileged sector.

President UNISAME Zulfikar Thaver said that since it has now been finally decided not to privatize the SME Bank nor to merge it with the National Bank of Pakistan, it is in the best interest of the sector to restructure and reinforce it to make it a specific SME bank in its true sense urgently.

Zulfikar Thaver pointed out that the SME Bank in Pakistan and the SME Bank in Malaysia were both established at almost the same time. It is doing exceedingly well in Malaysia but in Pakistan, it remained neglected and in the hands of non-experts and in the doldrums.

The idea was to make it an SME-specific bank that could comprehensively facilitate the sector but unfortunately it lacked the political will and also expertise of SME financing which is not everybody's cup of tea. It is a very specialized job calling for risk management and collateral management including warehousing, logistics, and goods in transit and production financing in its scope.

However, now that it is decided to broaden its scope and radius and to make it a real SME-specific bank, the State Bank of Pakistan (SBP) and the ministry of finance must co-ordinate to make it worthy of being labeled an SME-specific bank.

Either the government can inject more funds into it or allow the SME Bank to offer shares to the public to raise capital itself.

Secondly, it is important to have SME expert bankers to run the management of the bank effectively and restructuring is equally important together with reinforcing and expanding its scope to outreach the SMEs all over Pakistan.

The UNISAME Council members appreciated the establishment of the Exim Bank in Pakistan and said this together with a strong SME Bank will be a boon for the small to medium-sized entrepreneurs.

Press Release