Financing of small businesses urgedFebruary 28, 2014
Karachi: The Union of Small and Medium Enterprises urged the federal finance minister (FM) Ishaq Dar to examine the possibilities of financing the small to medium sized sector by an SME fund to promote venture capital under the umbrella and monitoring of the Small and Medium Enterprises Development Authority (SMEDA) which has placed the feasibility of several items on its website.
President UNISAME Zulfikar Thaver said the SME policy 2007 had envisaged and underlined the need for introducing venture capital to promote employment. He said many youth have experience, skill and are talented but do not have capital to start their business but with the finance under the venture capital could set up their businesses successfully.
Thaver said in all the advanced countries of the world venture capital is available and expressed hope that if special legal protection is given to the investing partner then the rich moneyed class would come forward and promote the venture capital to enable the SMEs manage the business as working partners. The wealthy persons are inclined to finance the skilled persons who do not have the capital but are not feeling secured for their investment and if venture capital is covered under strict laws of recovery and if the financing partner is given the protection against malpractices of the working partner then the system could be promoted.
Recently a big group approached UNISAME to introduce its medium sector industrialist for venture capital on the basis of 25% equity and another German firm also expressed its desire to finance Pakistani entrepreneurs under profit sharing on the basis of small equity just to ensure responsibility and care by the working partner to involve his interest and risk sharing in the venture.
There is vast scope in poultry, sheep breeding, dehydration, agro-based industries, light engineering, software, foodstuffs, bakeries, footwear and various other processing industries.