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SMEDA & Its Role in Facilitating

SMEs Access to Finance

Noor Ahmed
Regional Business Coordinator
SMEDA- Hyderabad

May 31, 2016

www.smeda.org

SMEDA Introduction

www.smeda.org

SMEDA Introduction
Established through Prime Ministers
Notification in October, 1998
SMEDA is an Autonomous Body
under the SMEDA Ordinance, 2002

www.smeda.org

Mandate & Mission


Initiate, Take, Continue, Implement & Perform
Any & All Activities for Encouraging and
Facilitating Growth & Development of SMEs
To assist in Employment Generation and
Value Addition to the National Income,
through
Development of the SME Sector,
by helping Increase the Number, Scale and
Competitiveness of SMEs
4

www.smeda.org

SMEDA Provincial Office Sindh


Provincial office in Karachi
Regional Business Centers:
Hyderabad

Sukkur
Larkana
Dadu
Ghotki

RBCs are developed in collaboration with


CCIs and other Business Associations etc.
RBCs Provide Guidance to New & Existing SMEs

www.smeda.org

SMEDA SINDH
1.
2.
3.
4.
5.
6.

Karachi
(Regional
office)
Hyderabad
(RBC)
Dadu (RBC)
Sukkur (RBC)
Ghotki (RBC)
Larkana
(RBC)

www.smeda.org

Operational Strategy
Building a Conducive Environment
Proposing and facilitating changes in Policy and
Regulatory Environment
Reducing the Cost of Doing Business
Facilitating Government-SME Interface

Developing Sectors and Clusters


Sector Strategies Development and Implementation
Cluster Development
Common Facility Centers (CFCs)

Provision and Facilitation of Services

Investment Facilitation (Helpdesk, Pre-feasibilities,


Business Plans etc.)
Technical services, Training, Finance, Business
Information, Marketing, and legal support
Productivity and Competitiveness Improvement

www.smeda.org

SME Density & SMEDA Outreach


Mingora

14.21%

2.18%
Issues

65.26%
Ghotki

17.83%
Hub

Source: Census of Economic Establishments 2005

Provincial Offices (4)


RBCs (25)

www.smeda.org

Categories of Support

SUPPORT

SECTOR DEVELOPMENT
STRATEGIES
OVER THE COUNTER PRODUCTS
& SERVICES
LEGAL ADVICE & SUPPORT
HRD SUPPORT TO SMEs
RESEARCH & POLICY SUPPORT
COMMON FACILITY CENTERS
INDUSTRY SUPPORT PRODUCTION
EFFICIENCY IMPROVEMENT

ASSISTANCE IN ACCESS
TO FINANCE
9

www.smeda.org

SMEDAs Key Achievements


(1998-2015)

10

www.smeda.org

Key Achievements
Over 91,311 walk-in SMEs facilitated
356 Business Plans prepared
SMEDA Web Portal
Total number of Visitors: 9.95 Million
Avg. Visitors per day: 2,476

Development & Downloads of:


170 Pre-feasibility Studies 2.26 Million Downloads
54 Regulatory Procedures 353,331 Downloads
319 Commercial Contracts 106,966 Downloads
Sector Briefs / Sectoral Information 24,303 Downloads
SMEDA Accounting Package (SMAP) 30,793

2,335 training programs organized with 100,290 participants


Investment facilitation of over Rs. 28 billion
Industry Support to over 495 firms
11
www.smeda.org

Key Achievements
Projects with International Development Partners:
Economic Revitalization of Khyber Pakhtunkhwa and
FATA - Multi Donors Trust Fund (MDTF)
Early Recovery & Restoration of Flood Affected
Communities - UNDP
Investment Promotion Unit (IPU) UNIDO/Italian Govt.
28 Sector Strategies developed and updated
Demonstration Projects undertaken through PSDP Funding
(27)

12

www.smeda.org

Key Achievements
Prime Ministers Youth Business Loan Scheme
Information Resources and tools developed:
85 Pre-feasibility Studies developed (Also translated into Urdu)
Financial Calculators - 4
Training Video Documentaries - 7
Over 14.31 million downloads of information Resources & Tools
Over 23,167 walk-in loan applicants facilitated at SMEDA Helpdesks
SMEDAs Media Participation 29 programs
Training to Partner Organizations 6
Training Provided - 294 participants from 38 cities
Capacity building support to 21 organizations for prefeasibility
development, helpdesk operations and website revamp
60 new Pre-feasibilities developed by Ministries / Organizations
17 Websites of MoIP and its Organizations revamped to cater for the
requirements of PMYBL Beneficiaries

13

www.smeda.org

Key Achievements
Research, Policy & Publications

14

SME Policy 2007


SME Development Report 2008-10
SME Baseline Survey 2009
SME Genesis, Challenges & Prospects
SME Development Report 2007-08 in Urdu
SMEDA: Journey Through The Decade-An Organizational Biography
SMEDA Research Journal
SMEDA Research Report Series
New Framework for Cluster Development
SMEDA Newsletter Quarterly
SME Observer Quarterly (Over 75 Research articles published)
Intellectual Property Rights Series (5 WIPOs Booklets)
Investment Guides Balochistan, Punjab and KPK
Secrets of E-Commerce - A Guide for Small & Medium Entrepreneurs
Trade Secrets The Export Answer Book for SME Exporters
Trade in Services An Answer Book for SME Exporters
How to Approach Banks
SMEDA Annual Reports
Accounting Handbook for SMEs
www.smeda.org

Development Partners
Multilateral Donors
Asian Development Bank
SME Sector Development Program
Rural Modernization Project

The World Bank


ICA I & II

USAID
Pakistan Initiative for Strategic Development and
Competitiveness (PISDAC)
EP- Firms
ASP-RSP

UNDP
Pro-Gole
Early Recovery

UNIDO
Cluster Development Program
Investment Promotion Unit

ILO
Research Studies

European Union
Seminars/Conferences

15

International Agencies
WIPO
IPR publications & awareness

JICA
Senior volunteers

ITC, Geneva
Adaptation of Publications
Seminars

SES, GIZ, Bfz, Germany


Energy Efficiency & Renewable Energy

KOSGEB, Turkey
Investment & Trade Promotion

SEHDA, Mauritius
Trade Delegations

CBI, Netherlands
Export Coaching Programs , Productivity
Enhancement Programs , CSR for Industry

ECO
Proposals & Conferences

D-8

www.smeda.org

Collaboration with International


Development Partners
On-Going Initiatives
Energy Efficiency Management Project JICA, GiZ, Bfz
Biomass Gasification Technologies - UNIDO
Senior Experts Services Program - SES, Germany
Knowledge Sharing Program (KSP) Republic of Korea
New Initiatives
Technical Support to Auto Parts Manufacturing Industry of Pakistan
JICA
Strengthening CFCs & Establishing ICT Business Incubation Center
KOICA

16

www.smeda.org

Collaboration with International


Development Partners
On-Going Initiatives
Investment Promotion Unit UNIDO
Feasibility Study prepared on Establishing Credit Guarantee Fund for SMEs
Consultative workshops with key stakeholders organized in April & May 2015

SPX Program - Joint Project of UNIDO and SMX SMEDA expected to be


operational from July 2015
28 Investment Profiles developed & Uploaded on UNIDO ITPO Network
4 Training Programs conducted by international Trainers, where 130 staff from
Partner Organizations participated
Facilitated B2B for Pakistani trade delegation in EIMA 2014- The largest
Italian show of Agri & Food Processing Machinery
Facilitated B2B Pakistani trade delegation in ECOMONDO 2014, the waste
management & Technologies Fair
Facilitated B2B Pakistani trade delegation in MACFRUT 2014, the Fruit &
Vegetable Processing & Technologies Fair
17

www.smeda.org

Future Outlook
SME Development Plan (2013-18)

18

www.smeda.org

SMEs and Government Priorities


Focus on Infrastructure, Governance and Conducive
Regulatory Regimes for Industrial Sector
Vision 2025 approach paper highlights SME sector
has huge potential and need more focus not directly
supporting but indirect policy interventions... This
would require the establishment of Common
Facilities Centres (CFCs) that would enable smallscale industries to improve value-added production
and quality control facilities.
cont
19
www.smeda.org

Proposed Intervention Model

Sectoral
Development

Regulatory Reform &


Policy Advocacy

Developing
Entrepreneurial
Ecosystem

SME Sector

Punjab
20

Sindh

Balochistan

Khyber
Pakhtunkhwa

FATA

Azad Jammu
Gilgit&www.smeda.org
Kashmir
Baltistan

SMEDAs SME Development Plan


Regional Strategic Thrust Plans
Gems
Dairy
Fisher
Regio
Logi
&
Ener
&
Con ies Light Leath Texti Miner Tou
n/Sec
ICT
Hort.
s.
Jewel
gy livesto st (Marin Engg. er
le
al
r
tor
ry
ck
e)
Punja
b

Sindh

KPK

Bal.

GB

AJK

FATA

Total

Complete Value Chain Analysis & Identification of


Interventions across Sectors
21

www.smeda.org

Development Projects - Objectives


SMEDA initiated a set of development projects in
various SME clusters to:
Catalyze induction of new technologies in private sector
through on ground demonstration
Extend common facilities such as design and prototype
development to SMEs
Safeguard and enhance exports amidst increasing global
competition

Projects planned in close consultation with private sector


(Chambers / Associations)
Implementation of majority of the Projects being
overseen by Boards of Management led by private sector
Cont
22

www.smeda.org

SMEDAs PSDP Portfolio (Since 2006)


PKR Million

Completed Projects (11)

1,464.48

Operational/ Under Execution


Projects (05)

852.20

Non funded / closed Projects (11)

456.29

Total (27 projects)


Contribution by Private Sector &
Provincial Govt.
Total Portfolio

2,772.97
1,047.15
PKR 3.82 Billion
Cont

23

www.smeda.org

Interventions

Government Priorities

Revival of Hyderabad Leather Value addition


Footwear Centre, Hyderabad Common Facility Center

Glass product Design and


2 Manufacturing Centre,
Hyderabad

Cost
(Rs. Mil)

58.89

Value addition
Common Facility Center

59.27

Agriculture Sector Dev.


Red Chilies Processing Centre,
4
Technology Up-gradation
Kunri
Common Facility Center

244.70

www.smeda.org

cont

SMEDA Training Services


Vision
To enhance access to sustained and high value
training services for growth & development of
SMEs.
Mission
To facilitate delivery & provision of affordable,
appropriate and effective SME training services
through training service providers.

25

www.smeda.org

SMEDA Training Services HRD Cycle


Training
Plan

TNA

Feedback
Evaluation

Identify
TSP

Develop
Training
Material

Execute
Training
Advertise
Program

26

www.smeda.org

Major Areas Focused for HRD of SMEs


Management
Entrepreneurship, Small Business Management
Marketing, SME Financing, Taxation

Technical
Compliance, 7 QC Tools, 5S & Kaizen
Quality Foundry Practices

Agri Business, Livestock & Dairy


Tunnel Farming
Dairy Farm Management

27

www.smeda.org

Access to Finance

28

www.smeda.org

Demand Side Issues (SMEs)


1. Lack of capacity / willingness to maintain formal
books of accounts
2. Time consuming & cumbersome banking procedure
3. Low awareness on actual business requirement &
corresponding financial product
4. Hesitation towards seeking professional services for
managing business / loan documentation
5. Excessive reliance on collateral and lack of cash
flow based lending
cont
www.smeda.org

Supply Side Issues (Financial Institutions)


1. Lack of credible information on the size of SME credit
market
2. High Mortality Rate; SMEs perceived as high risk
customers
3. Under-developed market for credit worthiness
assessment and checks
4. Limited first-hand interaction with SME
5. High transaction costs
6. Limited in-house capacity for SME related research &
development
cont
www.smeda.org

Addressing the Agenda of SME Finance


SMEDAs Role
SMEDA working on:
Demand side (SMEs) for making SMEs bankable
Supply side (SBP & Commercial banks) for building
capacity of financial institutions and developing program
lending schemes

Assisting Federal & Provincial Governments in rolling


out announced Budgetary Schemes

31

www.smeda.org

Making SMEs Bankable


Pre-feasibility Studies
Well researched investments plans on varied nature of
businesses
Over 150 comprehensive business opportunities available
FREE OF COST at SMEDAs web site
Provide guidelines on key business functions (production,
marketing & sales, human resource, etc.)
Detailed sector and Financial Analysis, investment and returns

Business Plans
Comprehensive made to order feasibilities
Substantially subsidized fees for development
www.smeda.org

Making SMEs Bankable


SMEDA Accounting Package (SMAP), a
customized Accounting Software , available free
of cost
Established Networks of SMAP accredited
accounting service providers in 8 cities; Lahore,
Karachi, Faisalabad, Islamabad, Rawalpindi,
Sargodha, Peshawar, Multan

www.smeda.org

Making SMEs Bankable


SME Finance Helpdesk
A platform for interaction amongst Banks and
SMEs for loan facilitation
Provide preliminary information to SMEs on loan
eligibility, documentation and processing
Shortlisted SMEs are assessed jointly with
Participating Banks for further processing
Coordination with PFIs for loan applications
submitted by SMEs
www.smeda.org

Making SMEs Bankable


Banking Products Awareness
Financing products of Banks for SMEs Information
available on SMEDA Website
Awareness Seminars conducted in collaboration with Banks
for provision of formal financing
Corresponding documentation and procedural requirements
Consultants Database for SME BDS Support
Database of around 390 experts. Consultants related to various
fields and sectors
Available free of cost at SMEDAs web site
Searchable option
www.smeda.org

SMEDAs Business Development


Support for Financial Institutions
Program Lending Schemes
Cluster based analysis of loan requirement
Type of loan (working capital, technology up-gradation etc.)
Lending Opportunity for Banks (No. of beneficiaries, average
loan amount / beneficiary etc.)
Detailed Financial Analysis of Lending program in consultation
with Participating Financial Institutions (PFIs)

Facilitating PFIs in Implementation Process


Organizing Awareness creation workshops
Design of Loan Application forms
Coordination for receipt of loan application and onward
processing by PFIs
www.smeda.org

Program Lending Scheme


Cutlery Sector

37

www.smeda.org

Lending Program- Definition

Development & Delivery of standardized financing


procedure and products for customers with similar
financing requirements.

38

www.smeda.org

Lending Through Programs

Identification of COMMON Financing Needs


Assess credit market POTENTIAL
Development of standard ELIGIBILITY criteria
Determination of standard limits or GRADUATING
LEVELS
Standardized loan processing and disbursement
PROCEDURES
Standardized MONITORING

39

www.smeda.org

Cutlery - Industry Structure


1. Approx. 300 units currently engaged in manufacturing
of various types of cutlery products
2. Two types of manufacturing units identified:
60% - 70% units are producing knife cutlery (including swords
and daggers)
30% - 40% units are producing table cutlery

3. 15,000 people are directly or indirectly employed by the


industry
40

www.smeda.org

Table Cutlery - Industry Structure


Formal data not available on number of units in cutlery sector
Approximately 80 - 100 units are involved in table cutlery
manufacturing
Number of
units

Capacity
(Dzn/day)

Product
Quality

Market

3-4

200

High

Export/local

Medium
Units

25-30

100

Medium

Local

Small Units

50-60

30-50

Medium-Low

Local

200+
individuals

Below 15

Low

Local

Size
Large Units

Cottage
Industry

Source: APCSUMEA
41

www.smeda.org

Trade Mechanism
Product mix of table cutlery units includes:
Cooking Spoons
Serving Spoons
Table Spoons
Other kitchen Items

Sales Pattern

42

www.smeda.org

Trade Mechanism
Medium and large size units:
Produce as per demand of institutional buyers of both local
and export markets
60 - 90 day credit is used by wholesalers (local market) for
procurement

Cottage Industry:
Is working as a subcontractor to medium/large size units
Processes raw material or semi-finished products

43

www.smeda.org

Raw Material
Stainless Steel is the basic raw material
AISI Standard 300 & 400 series steel is typically used

1
2
3
4

Source
Local (Mughal Steel)
Local (others)
Imported (Indian Origin)
Imported (others)

%age Share
30%
15%
30%
25%

Source: Mughal Steels, Industry

Current price increase trend 40% per annum


Historically prices increase @ 10% per annum
44

www.smeda.org

Raw Material
Three main channels of distribution for steel
supply:
Direct Sales to Industrial Consumers
Dealers Network
Commercial Investors/Wholesalers

45

www.smeda.org

Raw Material Consumption


Source

Consumption

Local Stainless Steel

2,700 tons per annum

Imported Stainless Steel


Total
Unit Size
Large
Medium
Small
Total

3,300 tons per annum


6,000 tons per annum

Production
Dozens / annum
180,000
750,000
720,000
1,650,000

Steel
Tons / annum
432
1,800
1,728
3,960

46

SMEDA Estimates, Industry visits, experts opinion

www.smeda.org

Financing Need
Financing for procurement of Stainless Steel
1. Rate of trade credit varies from 20% to 40% per annum.
2. Credit Requirement Steel Purchase: Rs. 300 million.
3. Market for Receivable financing: Rs. 70 million
Unit Size
Large
Medium
Small

Production

Average financing limits*

Dzns/annum
60,000

Payables
2.5

Receivable
2.6

30,000
12,000

1.0
0.5

1.5
0.5

Rate of Steel Rs. 9,5000 / ton, Credit Cycle 60 Days

* Rs. in million

47
SMEDA Estimates based on Industry visits

www.smeda.org

Formal Credit- The Benefits


Formal Credit is a better source of financing:
Factors

Bank Credit

Suppliers
Credit

Internal Rate of Return


Payback Period (yrs)

26%
3.71

21%
4.73

Net Profit in first year


Net Cash in first year
ROE in first year

901,572
1,110,955
20%

764,000
884,105
18%

Figures based on production of 50 kg/hr


48

www.smeda.org

Lending Programs for Financial Access


Scheme

Region

Financial
Institutions

PKR (Million)

Fisheries

Karachi

Transport

Lahore/Karachi All Banks

Power Looms

Faisalabad

Union, SME
Bank, PSIC

Cutlery

Wazirabad

BOP, NBP

30

PSIC

10

Plastic & Allied Lahore


Sectors
Total
49

SME Bank

50
9,000
250

9,345
www.smeda.org

Investment Opportunity for


Banks

50

www.smeda.org

Sector Development Plans

Logistics Sector

51

www.smeda.org

Logistics Sector Outlook


Current
GDP : US$ 0.66 B (0.38 %)
Export : US$ 530 M
SMEs : 70,000
Employment: 500,000
After 5 Years
GDP : US$ 6 B (2.3 %)
Export : US$ 6.00 B
SMEs : 79,000
Employment: 0.90 M

Game Changer
Improved logistics infrastructure and services to facilitate passage
of Regional Trade, especially Chinese cargo, to and from the world
Source: IFC, PIFFA, SMEDA Estimates

www.smeda.org

Inter Regional Trade Potential


1. China Global Trade USD Approx. 4 Trillion in 2014

0
20
,
2

KM

www.smeda.org

Logistics Industry
Sourcing & Intermediation
Sourcing & Intermediation
Exporter/
Exporter/
Producer
Producer

Local
Local
Factory/Yard
Factory/Yard
Storage
Storage

Outbound Cargo Handling &


Outbound
Cargo
Handling &
Domestic
Receipts
Domestic Receipts

Express Cargo
Agents

Air Cargo
Air Cargo
Center
Center

Transit
Transit
Airport
Airport

International
International
Airport
Airport

Freight
Forwarders

Central
Central
Warehouse
Warehouse

Local
Local
Warehouse/P
Warehouse/P
ickup
Point
ickup Point

Central
Central
Warehouse
Warehouse

Trucking
Companies

Cargo Depot
Cargo Depot

Clearing
Agents

Container
Container
Freight
Freight
Stations
Stations

Road
Air
Sea

Outgoing
Outgoing
Port
Port

Importer
Importer

Local
Local
Warehouse
Warehouse

Custom
Agent
Customer
Customer

Container
Container
Freight
Freight
Station
Station
Incoming
Incoming
Port
Port

Custom
Agent

Services
Infrastructure

Inbound Cargo Handling &


Inbound
CargoReceipts
Handling &
International
International Receipts

Shipping
Line
Adapted from KPMG Report

www.smeda.org

Logistics Sector - Truck Fleet Financing


Trucking, Freight Forwarding and Warehousing
sub-sectors, has an export contribution of USD 530
Million, 70,000 enterprises and 500,000 Jobs.
With CPEC it has a potential to generate USD 6
Billion, annually
According to Economic Survey 2011, there are
around 205,000 registered trucks, out of which
195,000 are plying on the roads
According to Engineering Development Board; 67%
of these trucks are 2-3 axle rigid trucks, around
25% are multi axle, and articulated trucks are only
8% of the total fleet
www.smeda.org

Logistics Sector - Truck Fleet Financing


For movement of international cargo through
CPEC, heavy, efficient trucks required. Based on
SMEDA estimates around 1,100 new companies
having an average fleet of 25 trucks each will be
required over a period of 5 years
Financing for establishment / expansions /
modernization of trucking companies with fixed
asset financing and working capital requirements.
The total investment in the trucking companies is
estimated at Rs. 630 Billion
Punjab, Sindh, GB and Balochistan potential areas
for investment
www.smeda.org

Logistics Sector - Truck Fleet Financing


Around 80 100 Workshops (Spare & Service) with
an average investment of Rs. 8 to 10 million required
for servicing the new trucking fleet. The total private
sector investment in this subsector is Rs. 1.00 Billion
Goods Transport Associations, Truck Manufacturers,
Chinese Companies, and Ministry of Commerce to be
consulted to identify the parameters of the financing
program

www.smeda.org

Logistics Sector Freight Forwarding Firms


Freight forwarding industry comprises of 4,000
firms out of which 500 firms are registered with
Pakistan
International
Freight
Forwarders
Association. Total employment around 40,000
individuals. These freight forwarders handle 50%
of the export tonnage. The rest is handled by the
clearing agents.
An estimated 7,000 new firms will be required with
an average investment of Rs. 40 to 50 million each.
Total investment mobilization in this subsector is
approx. Rs. 250 to 300 Billion, 85% is working
capital requirement.
www.smeda.org

Sector Development Plans

Fisheries Sector

59

www.smeda.org

Fisheries Sector Outlook


Current
GDP: US$ 0.5 B (0.3%)
Export: 0.32 B
SMEs: 0.02 M
Jobs: 0.80 M
After 5 Years
GDP: US$ 2.6 B (1.0%)
Export: 1.00 B
SMEs: 0.03 M
Jobs: 1.20 M

Game Changer
2000 EU Compliant Fishing Boats and Aquaculture
Source: Economic Survey 2013-14, TDAP, Industry Estimates

www.smeda.org

Marine Fisheries Value Chain


Auctioning

Fishing
Processing

Harvesting

Landing
Marketing
Post Harvesting

-Trawler

-Fish Hold

-Jetty Facilities

-Auction Shrimp

Fish

Exports
-FRP Hull
-Power Winch

(FRP + PU Ins)
-Icing & Chilling equipment

-GPS
Pre-Limited Export
-Echo Sounder
-Fish Crates.
Procg
-VHF Radio
-Storage
bidding

-Refrigeration
-Equipment

-Unloading

-Auction

Process
-Low value addition
-Fish Handling
-Weighing
-Buyer/seller

Peeling-

sheds

Refrigeration

THE
WHOLEProcg
CHAIN TO
BE HACCP/EU/SPS STANDARDS CERTIFIED
-Handling
Procg
-Equipment

61

www.smeda.org

Marine Fisheries Sector Overview


Fishing range is 200 nautical miles
Total estimated worth of Sea Food industry - 1.2 billion USD
800,000 people employed directly or indirectly with fisheries sector
13,000 fishing boats and 5 deep sea fishing trawlers
37 fish processing plants with capacity to process 586 metric ton fish per day

Production

2008-09

2010-11

2011-12

2012-13

*Marine fish

425

430

445

465

Sector
*Marine fish
62 * Thousand Metric Ton

Local
Consumption

Export

Poultry Feed

50%

22%

28%
www.smeda.org

World Trade & Pakistan Exports


World Imports Fisheries (Bn $)

Pakistans Exports (Mn $)

317034

292205
261050

100,110,191.00 98,828,438.00
81,821,308.00

2008

85,268,709.00
76,054,644.00

2009

2010

2011

2012

World trade growth 2008-2012 4.1%.

63

231040

2010

2011

2012

2013

Export Growth Rate 2008-2013- 7.07%

www.smeda.org

Economic Opportunity
Pakistans export stood at 350 million US$ in 2014-15.
Whereas, a rough estimate based on max. sustainable
yield figures, existing value addition, and foreign
benchmarks (Indian, Bangladesh and Malaysia
benchmarks for %age of landed catch exported) puts
our total export potential from this sector to around
US$ 1.5 2 billion from existing natural resources.
Including a high potential area, i.e., aquaculture, in
our fisheries sector, can yield even higher export
earnings from fisheries sector in Pakistan
www.smeda.org

Areas of Investment
Lack of formal sector financing has suppressed investment in
basic technologies and opened the door for informal financing
channels, such as through mole holders who charge exorbitantly
high rates.
Following avenues are available for financing
Purchase of new boats
Technological up gradation of existing boats (Boat
modification, Navigation equipment, nets, crates)
Working capital for voyage.
Aquaculture

65

www.smeda.org

Magnitude of Investment
Immediate opportunity is to launch a Islamic
Financing Program for introduction of 2000
modern FRP vessels, up gradation of 1000
existing boats and introduction of shrimp
farming:
New Modern Boats - 2000 Boats @ 10 Million each
Up gradation of existing boats - 1000 Boats @ 1 2
Million each

66

Source: State Bank of Pakistan

www.smeda.org

Geographical Area & Potential Partners


Geographical Area
Karachi ( Boats)
Gwadar ( Boats & Shrimp farming)
Thatta & Ketti bandar (Shrimp Farming)

Partner Organizations

Sindh Trawler Owners Association


Sindh Board of Investment
Fisheries Development Department Sindh
Federal Fisheries Board
SMEDA
67

Source: State Bank of Pakistan

www.smeda.org

Sector Development Plans

Dairy & Livestock Sector

68

www.smeda.org

Dairy & Livestock Sector Outlook


Current
GDP : US$ 20.3 B (11.6 %)
Export: US$ 0.24 B
SMEs : 0.65 M
Employment: 2.30 M
After 5 Years
GDP : US$ 51.7 B (15.40 %)
Export : US$ 2.80 B
SMEs : 0.80 M
Employment : 3.0 M

Game Changer
Genetic Improvement of Breeds with Disease Control (adherence
to OIE Standards) and Feed Improvement
69

www.smeda.org

Value Chain
PROCESSING
PROCESSING

INPUTS
INPUTS

Calf
Calf Mortality
Mortality 6-7
6-7 M/a)
M/a)
(US$
2B)
(US$ 2B)
&
& Smuggling
Smuggling

AI,
AI, Vaccines,
Vaccines, Medicines,
Medicines,
Feed/
Feed/ Fodder,
Fodder, Husbandry
Husbandry
Practices
Practices

Livestock
Livestock Trade
Trade
(Regular/
(Regular/ Eid
Eid Mandies)
Mandies)
14
14 M
M Cattle
Cattle
50
50 M
M Sheep/
Sheep/ Goats
Goats

0.65 M SMEs

Rural
Rural subsistence
subsistence farms
farms 75%
75%
Rural
semi
comm.
Rural semi comm. farms
farms 20%
20%
Peri
Peri Urban
Urban farms
farms 5%
5%
Controlled
Controlled shed
shed Negligible
Negligible

70 M Cattle
90 M Sheep/Goats
0.04 M Imported cows

Milk
Milk Production
Production
(47
(47 BL/
BL/ a)
a)
US$16.5
US$16.5 B
B
25
25 M
M Cattle
Cattle

20
20 %
% Own
Own
consumption
consumption
(10
(10 BL/a)
BL/a)
US$3.5B
US$3.5B

15%
15% wastage
wastage
5%
5% Calf
Calf Feeding
Feeding
(10
(10 BL/a)
BL/a)
US$
US$ 3.5B
3.5B

MARKETING
MARKETING

Export
Export
Meat:
Meat: US$
US$ 205
205 M/a
M/a
(0.05
(0.05 M
M T/a)
T/a)

Machinery/
Machinery/ Equipment
Equipment
Human
Human Resource
Resource

Slaughtering
Slaughtering
(3.3
(3.3 M
M T/
T/ a)
a)
US$
US$ 11.5
11.5 B
B
55%
55% Beef,
Beef, 20%
20% Mutton
Mutton
25%
25% others
others

55 %
%
Value addition
Value
addition
(3
(3 BL/a)
BL/a)
US$
US$ 1.5B
1.5B

Milk
Milk collection
collection
(24
(24 BL/a)
BL/a)
US$10
US$10 B
B
55%
55%

Milk
Milk traders
traders
(Wholesalers/
(Wholesalers/ Retailers)
Retailers)
Halwais
Halwais
(20.5
(20.5 BL/a)
BL/a)
US
US $11
$11 B
B
Milk
Milk processing
processing
companies
companies
(3.5
(3.5 BL/a)
BL/a)
US$
US$ 1.6B
1.6B

Local
Local markets
markets
Meat
Meat 2.34
2.34 MT/a
MT/a
US$
US$ 11.3
11.3 B
B

Local
Local markets
markets
US$
US$ 13.5B
13.5B (Open
(Open Milk)
Milk)
US$
US$ 1.5
1.5 B
B (Value
(Value added)
added)
US$3
US$3 B
B (UHT)
(UHT)

Export
Export
Milk:
Milk: US$
US$ 75
75 M/
M/ aa
(0.08
BL/a)
(0.08 BL/a)

Source:
Source: Economic
Economic Survey
Survey of
of Pakistan,
Pakistan, 2011-12,
2011-12, TradeMap,
TradeMap, Livestock
Livestock Census,
Census, 2006,
2006, Pakistan
Pakistan Dairy
Dairy Association,
Association, All
All Pakistan
Pakistan Meat
Meat Exporters
Exporters
www.smeda.org
Association,
UAF,
PAMCO
Association, UAF, PAMCO

Dairy & Livestock Sector


Livestock accounts for 51.1 percent of agricultural
value added and about 11.6 percent of the GDP.
35-40 million rural population dependent on livestock,
raising, having 2-3 cattle/buffalo, and 5-6 sheep/goat
per family which helps them derive 30-40 percent of
their income from it
Pakistan amongst top 5 milk producers in the world
with an annual gross production of 47 billion liters of
milk.
Buffalo and cattle are major sources of milk
contributing 67% and 31% to production respectively.
www.smeda.org

Private Sector Investment Opportunities


& Est. Investment
Calf Fattening Unit (500-10,000 calves)

Total Investment: 25-400 million rupees

Dairy Feed Manufacturing Unit (1-40 tons per


hour)

Total Investment: 15-400 million rupees

Controlled Shed Dairy Farm with Biogas Unit (4002,000 cows)


Total Investment: 400-2,000 million rupees

Meat Processing Unit (100- 500 cows)


Total Investment: 30- 120 million rupees
www.smeda.org

Major Stakeholders
Livestock & Dairy department of Provincial
Governments
Ministry of Food Security & Research
Karachi Dairy Farmers Association
Dairy Farmers Association, Karachi
Pakistan Dairy Association, Lahore
All Pakistan Meat Exporters Association
Corporate Dairy Farmers Associations, Lahore
www.smeda.org

Geographical Areas Suitable for Investment


Dairy Farming:
Lahore, Karachi, Faisalabad, Sahiwal, Sargodha, Gujranwala, Hyderabad,
Rawalpindi, Peshawar, Quetta, Sukkur, Nawabshah, Thatta
Dairy Processing:
Lahore, Thatta, Faisalabad
Fodder Preservation:
South Punjab, Some areas in Upper Sindh, Mirpurkhas, Lasbela
Slaughterhouse/Meat Processing:
Karachi, Lahore
Calf Fattening:
DG Khan, Rajanpur, Bakhar, Layyah, DI Khan, Mirpurkhas, Tharparkar,
Sanghar,, Zhob, Qilla Saifullah

www.smeda.org

Development Projects - Objectives


SMEDA initiated a set of development projects in
various SME clusters to:
Catalyze induction of new technologies in private sector
through on ground demonstration
Extend common facilities such as design and prototype
development to SMEs
Safeguard and enhance exports amidst increasing global
competition

Projects planned in close consultation with private sector


(Chambers / Associations)
Implementation of majority of the Projects being
overseen by Boards of Management led by private sector
Cont
75

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SMEDAs PSDP Portfolio (Since 2006)


PKR Million

Completed Projects (11)

1,464.48

Operational/ Under Execution


Projects (05)

852.20

Non funded / closed Projects (11)

456.29

Total (27 projects)


Contribution by Private Sector &
Provincial Govt.
Total Portfolio

2,772.97
1,047.15
PKR 3.82 Billion
Cont

76

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Interventions

Government Priorities

Revival of Hyderabad Leather Value addition


Footwear Centre, Hyderabad Common Facility Center

Cost
(Rs. Mil)
58.89

Glass product Design and


2 Manufacturing Centre,
Hyderabad

Value addition
Common Facility Center

59.27

Red Chilies Processing


4
Centre, Kunri

Agriculture Sector Dev.


Technology Up-gradation
Common Facility Center

244.70
cont

www.smeda.org

Interventions
1

2
3
4

Introduction of 10 Mid-sized
Fiber Re-inforced Pastic

(FRP) Vessels at Korangi Fish


Harbour
Mango Processing & Pulping
at Tando Allayar/ Mirpur

Khas

Vegetable Dehydration at

Noshero Feroz/ Nawabshah

Rice Mills Up-gradation in

Upper Sindh to increase

Processing Profitability

Government Priorities
Fisheries Sector Dev.
Technology up-gradation
Horticulture Sector Dev.
Common Facility Center
Technology up-gradation
Horticulture Sector Dev.
Common Facility Center
Technology up-gradation
Agriculture Sector Dev.
Technology up-gradation

Establishment of 02 REACH Leather Sector Dev.


5 testing Labs at Karachi &
Exports
Sialkot
Common Facility Center

Indicative Cost
(Rs mil)
350.00

390.00
400.00
450.00

279.50

www.smeda.orgcont

New Pre-Feasibilities in Agro Processing, Livestock &


Food Sector for Small Scale Investment (2014-15)
Cut Flower Farm - Gladiolus, Marigold, Statice and
Chrysanthemum
Off Season Vegetables - High tunnel
Off Season Vegetables - Low tunnel
Calf Fattening Farm
Camel Farming
Dairy Farm
Goat Fattening Farm
Inland Fish Farming
Layer Farming - 5000 Birds
Meat Shop - Mutton and Beef
Poultry Farm
Sheep Fattening Farm
www.smeda.org

New Pre-feasibilities in Agro Processing, Livestock &


Food Sector for Small Scale Investment (2014-15)

Shrimp Farming
Veterinary Clinic
Fodder Production & Trading Company
Fruit Grading & Packing
Honey Production, Processing, Packaging & Marketing
Pickle Production, Processing, Packaging & Marketing
Rose Water
Seed Oil Extraction Unit - Rape Seed
Spices Processing, Packing & Marketing
Bakery & Confectionery
Catering & Decorating Services
Restaurant Cum Fast Food

www.smeda.org

Standard Pre-feasibilities in Agro Processing, Livestock


& Food Sector
Agriculture
Cut Flower Farm (Rose)
Green/Poly House Farm (Export of Fresh Cut Roses) [August- 2015]
Off-season Vegetables Farming (Low Tunnel) [Feb-2012]
Off-season Vegetables Farming (Walk-in Tunnel) [April-2012]
Seed Processing Unit (Wheat & Rice)
Off-season Vegetables Farming (High Tunnel) [April-2012]
Animal Feed Mill
Maize Starch and Related Products
Aloe Vera Processing
Rose Water
Fodder Production & Trading
Cut Flower Farm (Gladiolus, Marigold, Statice and Chrysanthemum)
Seed Oil Extraction Unit [Jan-2012]
Olive Cultivation (Fruit Only) [Dec-2011]
Refined Guar Split [Feb-2012]
Seed Processing Unit (Wheat & Rice) [Sep-2014]
Grapes Farm [Feb- 2015]
Strawberry Cultivation [July-2015]

www.smeda.org

Standard Pre-feasibilities in Agro Processing, Livestock


& Food Sector
Live Stock
Environment Controlled Layer Farm - 30,000 Birds [Mar-2012]
Calf Fattening Farm
Poultry Farm (7,500 Broiler Birds)
Livestock Semen Production Unit (Cattle & Buffalo)
Layer Farming (10000 Birds) [June-2013]
Semi Intensive Sheep Farm [May-2011]
Environmental Controlled Poultry Farm (30,000 Birds) [Mar-2012]
Poultry Breeder Farm
Sheep fattening farm
Quail Breeder Farm & Hatchery Farming [Feb-2012]
Intensive Goat Breeding
Environmentally Controlled Poultry Farm (60,000 birds)
Camel Farming (Aug-2012)

www.smeda.org

Standard Pre-feasibilities in Agro Processing, Livestock


& Food Sector
Fisheries
Shrimp Farming
Commercial Fishing Trawler
Sea Food Processing Plant
Net Manufacturing Unit
Fiber Glass Boat
Inland Fish Farming [Mar-2011]

Dairy
Dairy Farm (25 Animal)
Environmentally Controlled Dairy Farm (50 American Cows)
Dairy Farm (100 Animals)

www.smeda.org

Standard Pre-feasibilities in Agro Processing, Livestock


& Food Sector
Food
Rice Husking & Polishing Unit [April-2015]
Slaughter house [Nov-2014]
Fresh Fruits Processing Unit (Mango, Citrus & Apple) [Sep-2014]
Kinnow Processing Unit
Milk Pasteurizing Unit
Tomato Paste and Fruit Pulp
Ice Plant (15, 30, 50 tons)
Tea Company
Bakery & Confectionery [Feb-2015]
Hard Candy Manufacturing
Fresh Fruits Processing Unit(Mango, Citrus & Apple) [Sep-2014]
Parboiled Rice Plant
Canned Food

www.smeda.org

-Continued

Potato Chips Manufacturing Unit


Dehydration Plant [Sep-2011]
Fast Food Restaurant
Spices Processing, Packing & Marketing
Pickle Production, Processing, Packaging & Marketing
Soft Candy
Honey Processing
Dates Processing Plant
Apple Processing Unit
Sausage Production Unit
Raisin Production Unit
Flour Mill [Jan-2011]
Mini Flour Mill [Jan-2011]
Meat Shop (Mutton and Beef) [Jan-2012]
Ice Cream & Juice Parlor [June-2015]
Mineral Water Distribution Model [June-2015]
Mineral Water Processing Unit [may-2015]
Mineral Water Smart Shop [June-2015]
Rice Husking & Polishing Unit [April-2015]
Home Made Food Products (Pizza & Cakes) [Oct-2015]

www.smeda.org

Summary of Investment Facilitation & Capital Asset Formation


For the Period October 1998 to June 2015

www.smeda.org

Training Services Data 2001-2015

Total Programs Conducted Overall in


Pakistan (July 2001-June 2015)

Number of Participants Trained


in Pakistan

2,332

103,661

Total Programs Conducted in Sindh


Region (July 2001-June 2015)

Number of Participants Trained


in Sindh Region

690

31,094

87

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Agri-Business Opportunities

88

Dairy Farming
Dairy Processing
Calf Fattening
Meat Processing
Biogas Units
Mango Pulping & Processing
Vegetable Dehydration
Guava Pulping Unit
Tomato Paste
Lemon Dehydration
Off Season Farming
Cold Storage
Dates processing & Packaging
Shrimp Farming
Rice Processing
www.smeda.org

Sector Development Plans

Energy Sector

89

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Thank You

90

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Energy Sector Outlook


Current
GDP: RE + E3C: US$ 0.04 B (0.02%)
SMEs: 300
Employment: 0.02 M

After 5 Years
GDP : US$ 4.7 B (2.00%)
savings
MSMEs : 1200
Employment : 0.06 M

Game Changer
Develop off-grid solar micro generation infrastructure and fasttrack E3C measures to ease energy demand
www.smeda.org

Private Sector Investment Opportunities &


Est. Investment
Commercial Dairy Farm (100-1,000 cows)

Total Investment: 60-600 million rupees

Dairy Processing Unit (10,000-50,000 liters per


day)

Total Investment: 300-1,000 million rupees

Feed Preservation Unit (50-500 acres)


Total Investment: 15-100 million rupees

www.smeda.org

Materials

Suppliers of materials for PV


cells, module,
arrays for PV
Suppliers
of materials
cells, module, arrays

Suppliers of materials for


Wind
turbineofsystems
& for
Suppliers
materials
installation
Wind
turbine systems &
installation

Manufacture/
Assembling

Components

Assemblers of solar
panel,
module, arrays
Assemblers
of solar
panel, module, arrays
Suppliers/ importers of
solar
panels &importers
system of
Suppliers/
components
solar
panels & system
components

Suppliers/ importers of
Wind
turbines
and of
Suppliers/
importers
system
components
Wind
turbines and
system components

System Integrators &


OTCSystem
systemIntegrators
importers &
OTC system importers

Suppliers/ importers of
pumps
& other
hydro of
Suppliers/
importers
system
components
pumps
& other hydro
system components

Suppliers/ importers of
gensets
& otherimporters
biomass of
Suppliers/
system
components
gensets & other biomass
system components

Fabricators/ assemblers
ofFabricators/
hydro turbines
&
assemblers
systems
of hydro
turbines &
systems

Importers/ fabricators/
BCCs
for biomass
Importers/
fabricators/
gas/power
systems
BCCs for
biomass
gas/power systems

Consumers

Consultancy
Consultancy

Transportation
Transportation

PCRET
Cell, panels, solar
power systems
PCRET
WindCell,
turbines,
Wind
panels, solarpower
powersystems
systems
MHP systems
Wind turbines,
Wind power systems
Small biomass
systems
MHP systems
Small biomass systems
Importers, suppliers &
assemblers
Wind &
Importers,ofsuppliers
power
systems
assemblers of Wind
power systems

Suppliers of materials for


micro
hydropower
systemsfor
Suppliers
of materials
micro hydropower systems

Suppliers of materials for


biomass systems
Suppliers
of materials for
biomass systems

Operations/ services/
logistics

Domestic Users
Domestic Users

Commercial Users
Commercial Users

Construction/
installation
Construction/
installation

Agriculture
Agriculture

Operations &
maintenance
Operations &
maintenance

NTDC/CPPA/
Industrial
Users
NTDC/CPPA/
Industrial Users

IPPs
IPPs

93

R&D, Financial Institutions, NGOs, Donors, Government support

www.smeda.org

Economic Opportunity
Ongoing power crisis has adversely affected routine life of
people and industrial, commercial and agriculture activities.
Despite recognized potential the share of renewable energy in
the total power mix remains negligible.
Main economic barriers for the introduction of solar
applications like, solar PV based solutions for households,
commercial retail sector/shops, solar tube-wells etc. can be
summarized as the excessively high initial outlay and financing
issues.
Capacity can be increased upto 250 MV (Rs. 45 billion) in the
short run through subsidies on Banks financed microgeneration applications, soft term refinance or credit lines to
financial institutions managed by the SBP.
www.smeda.org

Areas of Investment
Lack of financing has suppressed investment in standardized &
quality infrastructure
An umbrella financing scheme is proposed to be managed by
SBP through a PMU or a non-banking financial institution,
which may also absorb equity injections, credit and guarantee
lines from international donors for fund based or non-fund
based support to commercial banks. The proposal aims spur
demand for off-grid solar micro-generation application and
develop upto:
0.5 million solar PV based units for commercial users/shopowners
30,000 solar tube-wells for agriculture sector stakeholders.
www.smeda.org

Magnitude of Investment
Immediate opportunity:
PV solar tubewells: 10,000 @10 1.5-1.7 m each
Solar PV microgen. Solutions: 50,000-95,000@ 0.4
m 1.0 m each for commercial users

96

www.smeda.org

Geographical Area & Potential Partners


Geographical Area
All provinces

Partner Organizations
SBP
Commercial Banks
Pakistan Solar Association / REAP
AEDB
97

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Sector Development Plans

Leather Sector

98

www.smeda.org

Leather Sector Outlook


Current
GDP : US$ 1.5 B (0.9 %)
Export : US$ 1.20 B
SMEs : 1,900
Employment : 0.20 M

After 5 Years
GDP : US$ 3.7 B (1.4%)
Export : US$ 2.80 B
SMEs : 3,300
Employment : 0.41 M

Game Changer
Diversifying Products for Global Potential Markets; Ensuring
Compliance with International Standards
www.smeda.org

Value Chain
Hides
& Skins
US$ 52.11 M

Hide Markets
Agents

Hides/ Skins
(Local 40 M)

Chemicals
Machinery

Tanneries (675)

Semi Finished Leather


US$ 44.34 M

Leather
(Finished/Semi
Finished)

Finished Leather
US$ 15.23 M

Exports
(US$ 457 M)

Imports
US$112 M

Chemicals
Machinery
Accessories

Exports
US$ 344 M
Units 460

Exports
US$ 284 M
Units 330

Exports

100

Exports
US$ 78 M
Units 490

Exports
US$ 26 M
Units 45

Local

www.smeda.org

Leather Sector Outlook


3rd largest Foreign Exchange Earner
Work Force 200,000
Huge International Market worth US$ 113
Billion
Strong Linkages in International Markets
More than 50% exports to EU-27

101

www.smeda.org

Leather Sector Outlook


Areas for private sector investment
Capital Financing
Working Capital Financing

Magnitude of investment
Leather Footwear
Number of beneficiary units 400
Financing Rs 17.60 Billion

Leather Gloves
Number of beneficiary units 200
Financing Rs 3 billion
102

During 5 years

www.smeda.org

Leather Sector Outlook


Leather Tanneries
Number of beneficiary units
Financing Rs 1.20 Billion

Geographical areas suitable for investment


Sialkot, Karachi, Kasur, Lahore, Muredke

103

www.smeda.org

Leather Sector Outlook


Major stakeholders to work with:
Pakistan Gloves Manufacturers & Exporters
Association
Pakistan Footwear Manufacturers Association
Pakistan Tanners Association

104

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Areas of Mutual Collaboration

105

www.smeda.org

Areas of Mutual Collaboration


Channelizing funds towards SMEDAs identified high growth
sectors through Design and development of customized
programme lending schemes for SMEs:
Fisheries, Energy, Logistics, Leather, Dairy & Livestock
Provision of Business Development Support Services to loan
beneficiaries
Identification of priority areas / sectors by the banks and
SMEDA to develop business pre-feasibility studies
Joint information dissemination campaign for SMEs
regarding banking products and services
106

www.smeda.org

Thank You

107

www.smeda.org

Way Forward
Program Lending Scheme

Phase 01: Standardization

Develop and finalize ToC


Develop standards templates for collection, compilation &
presentation of data to FIs
Develop assessment criteria of program i.e. no. of SMEs
financed, Products launched vis-a-vis proposed scheme
Respective RBC will monitor implementation of scheme

www.smeda.org

Program Lending Scheme


Methodology
Phase 02: Sector / Cluster Data
Present compiled information to industry stakeholders for
expert opinion
Phase 03: Financial Product
Present results of the study to FIs for development of
Lending Programs and Financial Products

www.smeda.org

Program Lending Scheme


Areas Covered
Business processes to be covered in the study:
Introduction of the Sector: History, Product Mix,
Employment, No. of Units, Trade Mechanisms, etc.
Global Trade: Major players, Export Trends, Price
Trends, Emerging Products, WTO Impact, etc.
Credit Absorption Capacity: Investment per Unit,
Production Capacity, Sales Volume, Cost Structure, etc.
Financial Model to determine: Average loan size,
Repayment capacity, Recommended min/max financing,
etc.
Preliminary List of Potential Clients for FIs
www.smeda.org

Program Lending Scheme


Process Flow
Identification of sectors through development of sector fact sheets
for overview:
Sub-sectors
Associations & trade bodies
Estimated number of micro, small and medium enterprises, based upon
fixed assets / annual turnover / employee base / annual production
Cash flow cycle characteristics
Product / Service user profile
Purpose of loan in terms of working capital and / or expansion / upgradation

Identification and coordination with:


Interested Banks, for participation in design, development and roll out of
lending program
State Bank of Pakistan for information sharing and coordination
111

www.smeda.org

Program Lending Scheme


Process Flow
Solicitation of interest for final selection and working:
Presentation of preliminary data findings on identified sectors
to State Bank of Pakistan and Banks
Formalization of process and deliverables with interested
Banks

Coordination with sector associations and trade bodies


for information collection and demand side analysis
Development of program lending scheme:
Identification of lending potential based upon information
received
Financial model and feasibility analysis
Concept document - Draft 1
112

www.smeda.org

Program Lending Scheme


Process Flow
Internal evaluation and finalization of document by
SMEDA- Draft 2
Finalization of Draft 2 in consultation with Banks and
sector stakeholders (associations and trade bodies)
Final Draft
Capacity building of Banks and sector stakeholders (as
per need identified)
Implementation of Lending Programs with joint efforts
of SMEDA, Banks and Sector Stakeholders

113

www.smeda.org

Sector/ Cluster Development Services

www.smeda.org

Schemes for Public Sector Development Program

Glass Products Design & Development Center, Hyderabad (GPDMC)

This center would help the glass bangles manufacturing cluster of Hyderabad to diversify into
designing and manufacturing new glass products and providing training to workers and managers.

Before hand over to Sindh Small Industries Corporation (SSIC), 110 students were trained on glass
frosting techniques and beads making.

Approved Cost (Rs. 59.27 million)

Revival of Hyderabad Leather Footwear Center (RHLFC)

Revival of Hyderabad Leather Footwear Centre, Hyderabad aims to support and facilitate the footwear
manufacturing cluster in Hyderabad through consultancy services & trainings and encourage the growth
of new enterprises through business incubators.

Before hand over to Sindh Small Industries Corporation (SSIC), 105 students were on basic footwear
designing and pattern cutting. ToT for 04 master trainers was conducted.

Approved Cost (Rs. 58.893 million)

www.smeda.org

Schemes for Public Sector Development Program


Red Chilies Processing Centre, Kunri (RCPC)

The project is being funded by Public Sector Development Program (PSDP), Government
of Pakistan, to introduce & demonstrate mechanical dehydration of chilies, to improve
quality of dried chilies and to increase the profitability of chili farmers by minimizing
wastages.
Project completed. Demonstration will be complete in next harvest season. Centre ready for
privatization.
RCPC Approved Cost (Rs. 244.7 million)

Women Business Development Centre, Karachi (WBDC)

The Project aims to provide business support and business incubation services to women
entrepreneurs.
Project Complete and handed over to FWBL for further operations.

WBDC Approved Cost (Rs. 58.84 million)

www.smeda.org

Sector Development
Fisheries
Fisheries

Conducted value-chain analysis of the sector


Devised sector development strategy
Helped KFHA & FCS in structural reorganization, resulting in 200% increase in revenues.
Suggested changes in boat design, prototype boat made
Vendors developed for commercial boat modification
Launched boat modification and working capital financing schemes.
Initiated fishermen training with MFD, 15000 fishermen trained.
Developed and distributed fishermen training hand book in Urdu.
Assisted KFHA (Karachi Fish Harbor Authority) & FCS (Fishermen Cooperative Society) in
harbor development programs

Shrimp Farming
Conducted a detailed study on prospects of shrimp farming in Sindh
Called in foreign experts to analyze the local situation and to reactivate Gharo Shrimp Farm &
Hatchery
www.smeda.org

Sector Development
Diagnostic/ Sectoral Studies
Cluster Diagnostic Studies

Rice Processing Cluster, Larkana


Dates & Dairy Cluster, Sukkur
Bananas Cluster, Benazirabad
Chilies Cluster, Kunri
Pickles Cluster, Shikarpur
Guava Cluster, Larkana
Glass Bottles, Hyderabad
Handicrafts, Dadu

Sectoral Studies

Fisheries
Urban Transport
Dairy
Gems & Jewelry
Furniture
Marble & Granite
Mango, Guava and Vegetables Processing
www.smeda.org

Sector Development
Sectoral Profiles
Profiles

Power loom sector of


Hyderabad
Brief Profile of Light
Engineering Sector of
Hyderabad
Motor Cycle Manufacturing
www.smeda.org

Sector Development
Urban Transport

Developed the Urban Transport Scheme in Sindh as member of the Governors


team.

Scheme design
Financial modeling
Subsidy calculations
Specifications standardization
for buses
Investor facilitation
www.smeda.org

Sector Development
Financing Schemes
S.
No.

Scheme

Bank/DFI

Financing Scheme for Auto


Vendor Industry

SBFC/SME Bank

Carpet Manufacturing and Export

SBFC/SME Bank

Boat Making & Modification

SBFC/SME Bank

Working Finance for Fisheries


Sector

SBFC/SME Bank

Financing Scheme for Peesh-ban

Khushhali Bank

Financing Scheme for Retail Shop

NBP

www.smeda.org

Sector Development
Coordination and Support
Provided support in the implementation of the PISDAC (Pakistan
Initiative for strategic development and competitiveness) program
implemented by the Government of Pakistan and USAID.
Focus Sectors

Furniture Sector
Marble & Granite Sector
Dairy Sector
Leather Sector

www.smeda.org

Sector Development
Glass Furnace Up-gradation Project
Objective of the Project:

Model Glass Furnace Project aimed to improve the profitability of the Glass Bangles
manufacturers in Hyderabad by achieving fuel efficiency in glass manufacturing process.

Project successfully completed on June 30th 2007

Achievements

Construction of the Model Glass Furnace was completed in May 2006.

Efficiency of 20.6% in fuel consumption achieved on June 14 2006

Dissemination of technical information in a seminar on June 30th 2007

Successful completion of one year furnace life cycle

www.smeda.org

Sector Development
Gems and Jewelry Sector
Assistance to Pakistan Gems and Jewelry Development Company
Support Provided

Establishment of Pakistan Gems and Jewelry Development Company


Assistance in Financial matters
Corporate Services
Appointment of Auditors and Legal Advisors, Directors, CEO and Corporate
Secretary
Certificate of Commencement of Business
Administrative and HR Support
Hiring of all PGJDC Staff including the CEO
Procurement Rules/ Employee and Finance Policies for PGJDC
Acquisition of Office Premises and Procurement
Outreach Activities
Preparation of Umbrella PC1 for PGJDC Projects
Preparation of Activities sheet and Cash plan for approved PGJDC projects
MOU with Geological Survey of Pakistan/J.E. Austin Associates
Training Programs by PGJDC
www.smeda.org

Cluster Development
Aik Hunar Aik Nagar (AHAN)

AHAN was established on lines


of One Village One Product
(OVOP)
to
provide
technological assistance and
marketing support to unleash
the innovative potential of
selected rural clusters for their
www.smeda.org

Cluster Development
Industry Technical Support Initiative

The Industry Technical


Support Program of ISC
Sindh comprises of the
following initiatives:
1. Productivity and Quality Improvement Initiatives
2. Energy Efficiency Initiatives
3. Green Productivity / Cleaner Production Initiatives
4. Technical Trainings / Industry-Academia Linkages / Best Practices Manuals

www.smeda.org

SMEDA Sindh Key On-Going Activities

127

SME Development Projects:


Red Chilies Processing Center, Kunri
Entrepreneurship/Youth Development Initiatives
Entrepreneurship development & Business Incubation Facilitation programs
with Bahria University, KITE, IBA Karachi, NED University & other technical
& business institutes in Sindh
PMYBL Awareness programs being conducted and facilitation for potential
young entrepreneurs being done
WEs being affiliated in exhibitions & trade fairs in different cities of Pakistan.
Trainings for WEs being conducted in collaboration with Women
SMEs Development Initiatives
Productivity & Quality improvement programs in auto parts sector with JICA
Energy Efficiency project with JICA
Regular Interaction and training programs with FPCCI & Chambers of
Commerce (Chambers in Karachi, Hyderabad, Sukkur, & Dadu) and Industry
Association (PAAPAM, PMHA, KATI & others)
www.smeda.org

SMEDA Sindh Key New Initiatives


SME Development Projects:
Agro Food Processing (AFP), Center, Mirpurkhas (PC-1 submitted to PIDC)
Fruit, Vegetable and Condiments Processing Center FVCP, Naushehroferoze (PC-1
submitted to PIDC)

Entrepreneurship/Youth Development Initiatives


Youth Self Employment Project with UNDP
Skills & Business development programs with KTDMC & Sindh TEVTA identified
and implementation to be initiated soon

SMEs Development Initiatives


WEBoC training for SMEs
Fire Safety Audit of Industrial Units in Karachi
Facilitation for Investors at Khairpur Special Economic Zone & other industrial
estates
Networking of Investors in Sindh with Italian Technology providers in Agro
Processing

Collaborative Programs with Sindh Government


Coordination with Sindh Board of Investment for Agro Processing Investment in Sindh
Establishment of Business Support Center at Khairpur

128

www.smeda.org

Thank You
Contact Details
Regional Business Office Hyderabad
Hyderabad Chamber of Commerce and Industries, Aiwane-Tijarat Road Saddar, Hyderabad
Email: noor.ahmed@smeda.org.pk

www.smeda.org

Cluster Development

130

www.smeda.org

CLUSTER PROFILES DEVELOPED

131

Power loom sector of Hyderabad


Brief Profile of Light Engineering Sector of Hyderabad
Motor Cycle Manufacturing in Hyderabad
Tiles Shops in Hyderabad
Brief Profile of Ceramic Centre Nasarpur
Fresh Water Fish Farming - Hyderabad
Floriculture - Hyderabad
Sugar cane cluster of Nawabshah.
Banana Cluster of Nawabshah and Sindh.
Cotton Ginning - Ghotki / Sukkur
Dairy Sukkur
Red Chillies Kunri
Marble Cluster Hyderabad

www.smeda.org

Diagnostic Studies
Diagnostic Studies Conducted in Collaboration with UNIDO

Rice Processing Cluster, Larkana


Dairy Cluster, Sukkur
Mangoes and Bananas Cluster, Nawabshah
Chilies Cluster, Kunnri

Other Diagnostic Studies

Glass Bangles Cluster, Hyderabad


Pickles Cluster, Shikarpur
Guava Cluster, Larkana
Cut flower Cluster, Hyderabad

132

www.smeda.org

Common Facility Center (CFC) Projects


Glass Products Design & Development Center, Hyderabad
This center would help the glass bangles manufacturing cluster of
Hyderabad to diversify into designing and manufacturing new glass
products and providing training to workers and managers.

Leather Footwear Center, Hyderabad


This project will help in reviving and upgrading the Hyderabad
Leather Footwear center through installation of a some new
machinery and provision of working capital. The project aims to
upgrade this center to a modern, state-of-the-art facility which can
meet the growing needs of the leather sector.

Women Business Incubation Center (WBIC), Karachi


The WBIC is going to be a one-window facility for women
entrepreneurs, providing office space, a display center, conference
room, Training room and other services like Business linkages, and
marketing, legal and product development advisory services.

133

www.smeda.org

Issues in SME Financing

www.smeda.org

Sources of Working Capital for SMEs


Financial Sector Contributing 7% Working
Capital

Source: Gallup Survey of 1000 Industries in 2009 covering 12


www.smeda.org
cities & 8 sectors

Sources of Investment for SMEs


Financial Sector Contributing 8%
Investment

Source: Gallup Survey of 1000 Industries in 2009 covering 12


www.smeda.org
cities & 8 sectors

Legal Structure of Business Units


in Pakistan

Source: ILO SMEDA Study 2009

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WHAT does these pie charts say


about the Situation
Most SMEs operate through Self-Financing
or Retained Earnings
SMEs do not make use of Trade Finance for
Expansion
Fear of regulations discourage them to
come in the formal fold
Access to formal credit is strongly
correlated to firm size & age of the firm
The size of SME credit market is estimated
to be 250 to 400 billion
www.smeda.org

International Linkages &


Collaboration
SMEDA also aggressively works to develop international
linkages with other countries & international donor agencies.
SMEDA strives to develop SME Development ties on bilateral
and multilateral basis with countries around the globe.
SMEDA has working relations with over 50 countries which
includes share of information and experiences, business match
making for investment and joint venture opportunities, support
& encouragement of trade fairs Out of these over 50 countries,
SMEDA has signed Memorandum of Understanding with 9
countries with its counterpart agencies, these include China,
Poland, Turkey, Morocco, Tunisia, Algeria, Mauritius, Kuwait
, and Uzbekistan

www.smeda.org

SMEDA oversees efforts


SMEDA has also developed strong working ties with a
number of international donor agencies who are involved
in the economic development of Pakistan. This
collaboration generally includes financial and technical
assistance to the SME sector of Pakistan. These agencies
include JICA, UNIDO, UNDP, World Bank,
Asian Development Bank, USAID, SES, GTZ etc.
SMEDA in collaboration with JICA (Japan International
Cooperation Agency) has initiated an Industry Support
Program in Pakistan.

www.smeda.org

The present government's emphasis on


development of small and medium scale
enterprises in the private sector is being
duly appreciated by the donor countries.
Japan, European Union, Italian government
and Asian Development Bank have shown
keen interest in the various projects
identified by Small and Medium Enterprises
Development Authority (SMEDA) of
Pakistan
www.smeda.org