Investor Presentaiton
Chapter VIII - MSMEs - Revitalizing Punjab's Economy
Situational Analysis viz the MSMEs Sector
MSMEs in Pakistan account for 98% of all economic establishments. According to
estimates, there are 3.8 million MSMEs in Pakistan. These MSMEs are
concentrated in trade, services and manufacturing sectors. MSMEs sector of
Pakistan is heterogeneous, dispersed, and mostly unorganized which results in
market failure on part of intermediaries to provide support to this sector. Owing to
this fact, banks' credit to SMEs as a share in overall private financing does not
show an encouraging picture.
600
500
400
300
200
100
0
Now, the COVID-19 situation is still evolving, the economic situation is largely
uncertain due to which the exact economic fallout for the MSMEs is yet unknown.
Recent survey carried out by SMEDA to ascertain the impact of COVID-19 on
Small & Medium Business post-lockdown in Pakistan has some relevant findings below:
92%
enterprises reported disruption in
the supply chain
པ།, 23%
reported 100 percent loss
of export orders
95%
reported reduction in
operations
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2014
2015
2016
2017
2018
2019
SMEs Financing (Billions)
-SMES Financing as % of Total Private Financing
....... 2 per. Mov. Avg. (SMES Financing (Billions))
48% **
had already laid down workers
(almost 10,000)
26% ****
intend to rehire the same workers as
economic activity resumes
89% $
reported financial and credit
constraints and losses
Punjab Board of Investment and Trade (PBIT) has carried out sector specific analysis to gauge the impact of economic slowdown on industries
in Sialkot and industrial segments such as Poultry industry in Punjab. Sialkot, as Pakistan's third largest export center after Karachi and Lahore,
has a substantial share of Pakistan's total export revenue.
"
Sialkot based industry has gained global prominence for a highly diverse range of products ranging from sports goods, surgical
instruments, leather goods and gloves, readymade garments to musical instruments. Around 400,000 plus people are engaged directly
or indirectly with export activities through medium to micro-scale industries.
Other than the surgical instruments and allied units, other units
have had considerable setbacks due to cancellation or deferment
of export orders suggesting a substantial economic loss and
disruption across the sectors. Similarly, PBIT report finds that
Poultry industry has been hit by supply side crises, resulting in a
demand pushed price hike.
Economic Impacts on some MSMEs
Approximately 350,000 becoming economically
ineffective due to closure of banquet halls and
associate downstream value-chain activities in Lahore
Around 300,000 daily wagers work in auto-parts
market at Badami Bagh Lahore
Closure of eateries, retail, transport and other
activities impacting the 7 million informal employed in
the wholesale, retail and transport sectors.
Finance and Planning & Development Departments have had
detailed consultative sessions with various industrial sector
bodies, Chambers of Commerce and representative associations
with a view to assessing the magnitude of economic and business
impact of lockdown. While the observations and responses
largely resonate with findings of SMEDA survey, the following indicative statistics show the economic impact on some MSMEs sectors:
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