UNISAME seeks hike in micro finance from Rs 500,000 to 1 million

July 26, 2015 Off By Web Desk

KARACHI: President of the Union of Small and Medium Enterprises (UNISAME) Zulfikar Thaver and committee members invited the officials of the Small and Medium Enterprises Development Authority (SMEDA) at Unisame House to seek their guidance and endorsement for final submission of proposals for rapid promotion and development of the micro, small to medium enterprises (MSMEs) to the Ministry of Planning, Development and Reform (MoPD&R) at the SME Round Table Conference scheduled for 29th July 2015 at Islamabad.

The UNISAME chief welcomed Haroon Ahmed Khan general manager (GM), Muslim Raza deputy GM and Uzair Mohammad manager SMEDA, and explained in details the requirements of the MSMEs mainly access to finance, allotment of land, technical help, uninterrupted supply of energy and raw materials and marketing support and last but not the least protection against miscreants and corruption. He said UNISAME is dispatching its proposals to Dr Faheem ul Islam member MoPD&R and copy to Prof Ahsan Iqbal federal minister for planning development and reform simultaneously for his consideration.

Thaver highlighted the features of the SME Policy which envisaged each and every aspect of SME promotion and development. It is a comprehensive plan for SME promotion and development on modern lines with scientific approach. The SME policy was prepared with the help of the stakeholders and covered the issues of finance, technical support for product up-gradation, modernization and standardization.

The access to finance and facilitating the MSMEs sector are widely discussed and strengthening of banking. For technical support, the policy promised the setting up of an SME institute. The SME policy has emphasized the need for SME Export House, SME Fund, Venture Capital, Credit Guarantee and an SME specific bank.

The policy even promised an office for SME Ombudsman for redressing grievances. Thaver urged the MoPD&R to implement the SME policy in letter and spirit and also study the World Bank report prepared by Dr Salman Shah and his team for strengthening SMEDA to increase its scope and out reach.

Secondly, he stressed the need to facilitate the sector by making of business easy by removing all impediments and simplifying procedures, implementation of one window operation, availability of information centres at SMEDA offices, reduction of duties on raw and packing materials, promotion of innovative and import substitution industries, incentives for new entrants, subsidizing solar, wind and biomass devices for alternate energy and duty free imports of second hand tyres for alternate fuel.

UNISAME participants pinpointed the need for increasing the limits of micro finance banks from Rs 500000 to 1 million to enable them finance the small entrepreneurs who are not financed by the commercial banks.

The members also requested for removal of withholding tax (WHT) on banking transactions on non filers and requested for at least one years time to enable the non filers to become filers. The WHT on profits on bank savings account is also high and the members complained of double taxation, first on profits and then on withdrawal of profits which is unfair and unjust.

Basically UNISAME members had their reservations on WHT itself which they said is against the norms of taxation and cannot be imposed in this manner. Of course income tax is acceptable because it is on income but WHT on withdrawals is unfair because many a times it is not related to income and cannot be charged in this manner on each and every transaction.

Haroon Ahmed Khan GM SMEDA said the sector deserves priority being the majority sector and the backbone of the economy and he would make his best efforts to impress upon the government to give priority to the sector.

Muslim Raza Dy GM said he endorsed the demands of UNISAME for global marketing support for SME wares and work on war footings for the establishment of the SME Export House to inform, educate and promote SME products on the internet through SME galleries. Uzair Mohammad said SMEDA would sharpen its training tools for the sector and conduct training courses in Information technology, energy preservation, and accounting systems.