ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has stated that the small and medium enterprise (SME) sector was struggling the most owing to measures taken by the government under the influence of the International Monetary Fund (IMF).
The chamber has urged the government to announce a new SME policy soon in order to create a conducive environment for the SMEs.
In a statement issued on Monday, ICCI President Ahmed Hassan Moughal said due to tough business conditions, SMEs were compelled to take loans in order to meet the needs of working capital, as their survival was in jeopardy.
He said according to the State Bank of Pakistan, SMEs obtained loans worth Rs111 billion during the first eleven months of the financial year 2018-19, out of which Rs94 billion was taken for working capital instead of expansion, which showed that they were undergoing difficult times.
He noted that during the last 11 months, the value of rupee experienced over 30pc depreciation, the prices of electricity, gas and petroleum products were hiked many times, while taxes were increased to unprecedented levels in the budget.
“All these measures have increased the cost of doing business in the country,” he maintained.
Moughal further noted that inflation in the country had exceeded 10pc, causing hefty squeeze in the purchasing power of people, adding that higher inflation had also affected business activities in the country.
He said that SMEs in the region were getting around 19pc of the total private sector credit, but in Pakistan, they were getting just 7.7pc credit, which showed that access to finance was a major problem for businesses in the country.