Major Obstacles to Economic Engines: Myths & Realities in Pakistan

Abstract

SMEs are the engines for economic growth all over the world so as in Pakistan. One simply cannot overlook the importance of SMEs in struggling economy of Pakistan. Apparently access to finance is normally considered to be the most important variable in the development of the SMEs sector throughout the world but there are some other variables also which hinders the growth of these economic engines. In Pakistan although several steps have been taken by the government in development and encouraging the SMEs like creation of Small and Medium Enterprises Development Authority (SMEDA), SME bank and several small/medium business loan products by conventional and Islamic banks, etc. but still we could not reach to the full capacity of its utilization. This is a descriptive or qualitative research which is based on the secondary data taken by the survey on enterprise growth constraint by World Bank. It seems that there is a need to look for the hidden causes other than the economy which hamper SMEs to foster to its full potential in Pakistani industry. The paper in an attempt to highlight these causes which may include energy and power crises, corruption, court system, law and order situation, transportation, unskilled labor force etc.

Keywords: SMEs; Economic Engine; Pakistan; Enterprise Survey; World Bank; Biggest Obstacle to firms.

DOI: 10.7176/JESD/10-6-16

Publication date:March 31^st 2019