Obstacles to Growth of SMEs

SMEs are seen as growth engines in developing countries. The importance of this field can not be ignored because of its greatest importance and its contribution to GDP growth and employment creation. The SME sector in Pakistan faces many problems that hinder its growth. The main obstacles to the growth of SMEs include fiscal constraints, regulatory and fiscal constraints, infrastructure constraints and human resource constraints. These four factors are exacerbating the growth of SMEs in Pakistan.

It is considered to be one of the biggest obstacles to the growth of small and medium enterprises and the lack of information on the credibility of small business has made it difficult for SMEs to borrow money under difficult financial conditions. With these changes, all designated banks and credit institutions are required to provide credit information they hold for business, subject to the license of small business. In order to bring greater competition to the financial markets, this information is equally shared without affecting all financial service providers.

Finance alone is not sufficient for the development of small and medium enterprises; many non-fiscal matters are also important for the development of small and medium enterprises. Care centers and counseling centers throughout the country are needed to provide small and medium enterprises with government advice on planning, product market availability, and basic needs of paper procedures.

The proposed research aims to prepare a main report on the financing of small and medium enterprises and SMEs. The report emphasizes obstacles facing SME financing and provides new insights to overcome these constraints in SME development. The report will review these issues and provide policy advice in selected member countries. The target audience of this report is Islamic financial institutions, traditional financial institutions of the World Bank and the Islamic Development Bank, regulators, policy makers, small business associations, multilateral agencies, academic circles, standard setters reports, We will contribute to policy debate by discussing the set of strategic recommendations presented in the report.