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Assignment: SMEDA
Subject: Business Finance

Submitted To: Miss.Sahresh Zafar

Submitted By: Sadaqat Khan (2547)

Class: BBA (H.O.N.S)

4th Semester
Date: Sep/10/2009

Qurtuba University
Of Science & Information Technology
Peshawar Campus

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Table of Contents

1.1 SMEDA Vision
1.2 Mission Statement
1.3 SMEDA Objectives
1.4 SMEDA SME’s Definition
1.5 SME Definitions used by various institutions in Pakistan:-
1.6 Introduction - Board of Directors

Chapter 2 Business Opportunities

2.1 International Business Opportunities Service
2.2 Business Matchmaking Service

Chapter 3 Business Development

3.1 Business Guides
3.2 Pre-feasibility Studies
3.3 Regulatory Procedures
3.4 Sector Briefs
3.5 SMEDA Publications

Chapter 4 SMEDA Services

4.1 Training Services
4.2 Business Plan Development Services
4.3 Financial Services
4.4 Policy and Planning: (Role of Policy & Planning Department)
4.5 Legal Services: (Legal Services for SMEs)


5.1 Dairy Sector: (Sector Significance)
5.2 Gems & Jewellery Sector
5.3 Agribusiness Services at SMEDA (B&SDS) (Agriculture & Horticulture Sector)

Chapter 6 SMEDA Projects

6.1 Women Business Incubation Center
6.2 Industry Support Program
6.3 SME Cluster Development
6.4 Public Sector Development Programme PSDP

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(Small and Medium Enterprise

Development Authority)

1. Introduction:-
SMEDA was establish in October 1998 to take on the challenge of developing small
and medium enterprises (SMEs) in Pakistan with a futuristic approach and
professional management structure it has focus on providing an enabling environment
and business development services to small and medium enterprises, SMEDA is not
only an SME policy advisor body for the government of Pakistan but also facilitates
other stockholders in addressing their SME development agendas.

1.1 SMEDA Vision:-

Growth of globally competitive SME sector through a conducive and facilitating
environment and support services as an engine of growth and sustainability to national

1.2 Mission Statement

To function as the promoter & facilitator of SME sector in Pakistan by creating a
conducive and facilitating environment as well as providing and facilitating service
delivery to SMEs for enhancing their capacities and competitiveness.

1.3 SMEDA Objectives:-

1. Formulate Policy to encourage the growth of SMEs in the country and to advise
the Government on fiscal and monetary issues related to SMEs.
2. Facilitation of Business Development Services to SMEs.
3. Facilitate the development and strengthening of SME representative bodies
4. Set up and manage a service provider’s database including machinery and
supplier for SMEs.
5. Conducting sector studies and analysis for sector development strategies.
6. Facilitation of SMEs in securing financing.
7. Strengthening of SMEs by conducting and facilitating seminars, workshops and
training programs.
8. Donor assistances for SME development of SMEs through programs and projects.
9. Assist SMEs in getting international certifications (such as UL, CE, DIN, JIS,
ASME, KS, etc.) for their products and processes.
10. Identification of service opportunities on the basis of supply/demand gap.

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1.4 SMEDA SME’s Definition: - Small &

Medium Enterprises are defined as follows, as approved in SME Policy 2007

Enterprise Category Employment Size (a) Paid Up Capital (b) Annual Sales (c)

Small & Medium Enterprise (SME) Up to 250 Up to Rs. 25 Million Up to Rs. 250 Million

1.5 SME Definitions used by various institutions in Pakistan:-

Institution Small Medium

SME Bank Total Assets of Rs. 20 million Total Assets of Rs. 100 million
Federal Bureau of
Less than 10 employees N/A
Punjab Small Industries Fixed investment. up to Rs. 20 million
Corporation excluding land and building
Punjab Industries
Fixed assets with Rs. 10 million excluding cost of land
Entity engaged in handicrafts or manufacturing of consumer or producer
Sindh Industries
goods with fixed capital investment up to Rs.10 million including land &
State Bank of Pakistan An entity , ideally not being a public limited company, which does not
(SME Prudential employee more than 250 persons ( manufacturing) and 50 persons (trade /
Regulations) services) and also fulfills one of the following criteria:
(i) A trade / services concern with total assets at cost excluding land and
buildings up to Rs 50 million.
(ii) A manufacturing concern with total assets at cost excluding land and
building up to Rs 100 million.
(iii) Any concern (trade, services or manufacturing) with net sales not
exceeding Rs 300 million as per latest financial statements.

SME Definitions in selected Asia Pacific Economic Cooperation (APEC) member countries
Enterprises exporting up to US$2.5 Million a year are considered Small by the State
Bank of Pakistan.

Country Sector Employment Other Measures

Manufacturing Less than 100 employees
Services Less than 20 employees
Manufacturing Less than 500 employees
Services Less than 50 employees
Varies with
China Usually less than 100 Employees
Indonesia Less than 100 employees
Manufacturing Less than 300 employees ¥100 million assets
Japan* Wholesaling Less than 100 employees ¥30 million assets
Retailing-Services Less than 50 employees ¥10 million assets
Manufacturing Less than 300 employees
Services Less than 20 employees
Malaysia Varies (for SMI) Less than 75 employees (Different for Less than RM 2.5 million

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Bumiputra Enterprises)
Philippines Less than 200 employees P 40 million assets
less than S$12 million
Singapore fixed assets
Services Less than 100 employees
USA Less than 500 employees

1.6 Introduction - Board of Directors:-

Public Sector:

Minister of Industries, Production & Special Initiatives

Secretary Ministry of Industries, Production & Special Initiatives
Secretary Ministry of Commerce
Secretary Ministry of Finance
Chairman Central Board of Revenue
Chief Executive Officer SMEDA

Private Sector:

Mr. Almas Hyder Chief Executive Officer Synthetic Products Enterprises (Pvt.) Ltd.
Mr. Mansur Khan President/Zarai Taraqiati Bank Limited.
Mrs. Amna Nasir Proprietor, Arts & Gems Exports
Dr. Fasial Bari Executive Director Mahboobul Haq Human Development Centre
Engr. Squadron Leader (Rtd) Nauman Wazir, Chief Executive Officer, Frontier Foundry
(Pvt) Ltd.
Mr. Kamal-ud-din Ahmed, Chairman/Chief Executive Sika (Pvt) Ltd.

2. Business Opportunities:-

2.1 International Business Opportunities Service:-

SMEDA is providing a unique service to facilitate
SMEs by promoting business-to-business relationships. SMEDA's role is that of a
matchmaker and we provide a platform for SMEs to come together and explore different
areas of cooperation using SMEDA's databases and web-site. Now anyone can look for
joint ventures, buy running business, form equity partnership, look for agents or
distributors franchises and other business investment opportunities through this initiative.
Following is the list of available business opportunities:-

Business Title / Description Country Validity

Biodegradable Wound & Burn Healing Dressings, Czech Republic On Going
Chemicals, Chemical Processes &
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Fire and Rescue Equipment
.Fire Equipment China On Going
Exporting Food Products Iran On Going
Information Technology
MYSQL AB is looking for new Gold partners Japan On Going

2.2 Business Matchmaking Service:-

SMEDA is providing a unique service to facilitate SMEs by promoting business-to-
business relationships. SMEDA's role is that of a matchmaker and we provide a platform
for SMEs to come together and explore different areas of cooperation using SMEDA's
databases and web-site. Now anyone can sell their business, look for joint ventures, buy
running business, form equity partnership, look for agents or distributors through this

3. Business Development:-
3.1 Business Guides:-

Business Guides provide information and web links intended for entrepreneurs who want
to start new businesses or expand the existing ones.
Business Guides like :-
 Copyrights Registration Procedure .
 Custom Clearance Procedure for Export .
 Custom Clearance Procedure for Import .
 Export to Afghanistan .
 Export Process Flow, Procedure & Doc.
 Export Processing Zone .
 Import Regulations in the EU .
 Import Regulations in the USA .
 How to Obtain Finance from First Women Bank Limited .
 To Obtain Finance from SME Bank .
 Obtaining Financing under the Export Finance Scheme .
 Company Registration Process .
 Legal Guide for Gemstones and Jewelry Sector .

3.2 Pre-feasibility Studies:-

Pre-feasibility studies are well researched yet generic
due diligence reports that facilitate potential entrepreneurs in project identification for
The main objective of the pre-feasibility studies prepared by SMEDA is to provide
information about investment opportunities to the small & medium enterprises (SME’s).
A typical pre-feasibility study provides:-
1. Comprehensive information for investment opportunity in a business.

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2. Specific information regarding different business areas like, marketing, technical,

information etc. for the existing entrepreneurs to improve their exiting setup.
3. Project investment information and financial projections to support viability of the

3.3 Regulatory Procedures:-

SMEDA Regulatory Procedures have been developed to disseminate
information and to assist Small & Medium Enterprises on existing regulatory
environment, through user-friendly systems, providing detailed description of laws &
regulations, including processes required for compliance while doing business in

3.4 Sector Briefs:-

One of the objectives of SMEDA is to provide fresh impetus to Pakistan’s economy
through an aggressive Sectoral Development program. Its role in this regard will be
recommending policy guidelines to the government for development of small & medium
The sectors have been selected on the basis of criteria like:
* Growth Rate
* Significant SME Presence
* Labor Intensity
* Sustainable Competitive Advantage
* High Value Addition & Export Potential

3.5 SMEDA Publications:-

Small & Medium Enterprise Development Authority, SMEDA, has
initiated a process of articles, books & other publications to create awareness among the
general public on optimal business practices, regulatory issues, GOP schemes, new
business concepts, etc.

4. SMEDA Services:-
4.1 Training Services:-
SMEDA organizes training programs, seminars, workshops and conferences of
short duration in major cities across the country for raising awareness and capacity
building of SMEs. These need based training programs are affordable, appropriate and
innovative. These programs are aimed at improving knowledge, skills and competencies
in the technical, marketing, financial, compliance, policy, regulatory, legal, commercial
and other important functions. These programs help to improve major performance
indicators such as productivity, quality, competitiveness and sustainability etc. The results
include improvement in export potential, investment promotion, business transparency,
human resource development, managerial capacity building etc. These programs help
decreasing the level of SME mortality and increasing efficiency.

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4.2 Business Plan Development Services:-

Business Plan development services is one of the key services provided to enable existing
as well as potential investors to make well researched and informed investment decisions.
A business plan is a plan that enables a business to look ahead, allocate resources, focus
on key points and prepare for problems and opportunities presented by changing business

Generally people think of business plans, first for starting a new business or applying for
business loans. However, business plans are also vital for managing an existing business,
whether or not the business needs new loans or new investments. Businesses need plans
to optimize growth and development according to plans and priorities.

A business plan acts as a communication tool, which can be used to attract investment
capital, secure loans, and assist in attracting strategic business partners. As a management
tool, a business plan helps in tracking, monitoring and evaluating the progress of a
business. As a planning tool, the business plan guides an entrepreneur through the various
phases of the business, which helps in identifying roadblocks and obstacles that can be

4.3 Financial Services:-

Financial Services Group (FSG) is one of the support units of SMEDA. As the
name suggests, FSG is responsible for all financial consulting and advisory services that
SMEs may require. As for all the support functions, FSG caters to both internal sector
teams as well as any external walk-in SMEs. In addition to such consulting services, FSG
also acts as coordinator of government schemes, which involve financial institutions.

4.4 Policy and Planning: - (Role of Policy & Planning Department):-

Policy & Planning Division of SMEDA has dual
focus internal & external. It plays a key role in devising and coordinating policies, action
plans and strategies for SMEDA operations. On the other hand it has a mandate to carry
out research, communicate with stakeholders and advocate policies with different tiers of
the government with an ultimate objective of creating a conductive business environment
for SMEs in Pakistan. P&P is the hub of policy and regulatory research that provides
SME specific policy input to all tiers of government, government agencies and
institutions, SME associations, industrial clusters and individual entrepreneurs.

4.5 Legal Services:- (Legal Services for SMEs)

Welcome to SMEDA Legal Services! We add value
to the business of Small and Medium Entrepreneurs (SMEs) through facilitation in: (a)
resolving their legal problems (b) creating awareness of legal rights (c) disseminating
information on existing regulatory requirements through training courses, seminars, self
help manuals and guides, (d) frequently asked questions, and (e) interaction with
regulatory authorities and service providers for removing legal impediments.

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5.1 Dairy Sector:- (Sector Significance)
Agriculture is the largest sector of the Pakistani economy, contributing 23
percent to the GDP and involving 42 percent of the total labor force. Livestock is the
largest of the various agriculture sub sectors. Net foreign exchange earnings from
livestock products and by products like meat, skins, hides etc were more than Rs. 53
billion in 2003-04 (Source: FAO-Economic & Social Department Reports) that is about
11 percent of the overall export earnings of the country.
Livestock accounts for 46.8 percent of agricultural value added and about 10.8 percent of
the GDP. Milk is the largest commodity from the livestock sector accounting for 51
percent of the total value of the sector. The farm gate value of milk is estimated to be
more than Rs. 390 billion.
Pakistan is the Fifth largest producer of milk in the world with a total production of 28
billion liter of milk a year, whose value is more than that of the combined value of wheat
and cotton, from a total herd size of 27 million milk animals (buffaloes and cows).
There is a consensus among the stakeholders and the development experts that Pakistan’s
Dairy Sector has immense potential for growth. The same has not been realized due to
various gaps.
The vital missing link being lack of shared vision and strategy for the development and
lack of effective collaboration among the stakeholders including support institutions and
the government agencies to implement the agreed strategy.

5.2 Gems & Jewellery Sector:-

The art & craft of fine quality jewellery manufacturing are deeply
rooted in the traditional heritage and history of Pakistan. It was however in the Mughal
period that the artisan class of goldsmiths arose to attain a distinct status in the
subcontinent. The most famous among the various jewellery types that emerged during
the times of the Mughals include, Minakari, Kundan, Polki, and Nauratan, etc. Presently,
metropolitan cities of Lahore and Karachi are the major hubs of jewellery manufacturing.
There are more than thirty major cities and nearly three hundred smaller cities/mandi
towns where jewellery manufacturing and trading clusters cater to domestic demand. In
addition, there are at least 45,000 villages where jewellers operate as single-shop,
manufacturing and selling units to meet the demand of rural population.
Pakistan is a country with a population of more than 150 million people and a rich
tradition of craftsmanship in jewellery manufacturing. Skilled/semi-skilled labour force is
available at relatively lower rates, which offers a comparative advantage to the country.
Their skill enhancement through training would lead to greater competitiveness.

Currently, Pakistan imports more than one hundred and twenty tones of gold per annum,
which makes it the eighth largest consumer of gold in the world. In the year 2002,
Pakistan exported gems & jewellery worth US$32 million (which went down to US$28.2

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million in 2003). Although, the volume of exports of gems & jewellery from Pakistan is
of no great significance in the total global trade of US$84.4 billion and much lower than
India, which is our biggest regional competitor, but the growth potential of exports in the
sector is huge

Gems & Jewellery Sector Strategy:-

The strategy is a combined effort of Gems &
Jewellery Industry's stake holders, SMEDA (MOIP&SI) and J.E Austin Inc (USAID). It
is for the first time that a working Strategy from mine-to-market has been developed and
is based on first hand information from the different stakeholders rather than relying on
the secondary data available. The methodology applied was studying the value chain
analysis and recommending solutions to the problems and designing possible pilot
projects for immediate implementation.

•Recommendations for Geological Survey of the Balochistan and NWFP.

•Introduction of Modern Technology and Methods of Mining.
•Establishment of Gems Trading House/Bureau at Karachi, Peshawar and Quetta.
•Establishment of Cutting Centres in Peshawar, Karachi and Lahore.
•Developing Training Facilities in the Cutting, Gemmology, Designing and
•Quality Control - Hallmarking and Assaying Facilities as well as Gem labs for
•Marketing and Branding Initiatives, i.e., domestic market trend surveys,
•Website development, policy/regulatory changes to improve enabling environment
for exports, seminars and Exhibitions.
•Development of Infrastructure i.e. logistics, financial, services, insurance and MIS

5.3 Agribusiness Services at SMEDA (B&SDS) (Agriculture & Horticulture Sector):-

SMEDA is a facilitating body working for the development of SMEs in the
country. Business and Sector Development Services (B&SDS) department of the
SMEDA is responsible to provide technical assistance to SMEs. Agribusiness
Development Services of B&SDS is providing proactive technical and managerial
assistance to agro SMEs in the country.

Future Initiatives

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•To improve productivity, competitiveness, market intelligence and to improve access

to financing for small and medium agricultural enterprises (as timely availability of
credit is the main hindrance in the productivity of Agri SMEs).
•Increasing access to agribusiness finance available from financial institutions to
agro-enterprises for new starter or enhancing capability of existing entrepreneurs.
•Providing capacity building for horticulture and agriculture (agribusiness);
streamlining the collection and dissemination of market information; strengthening
agribusiness technical training capacity; upgrading institutional linkages (Private
Public Partnerships, building awareness for the need to comply with international
agricultural product standards and practices.
Revising and updating the agribusiness related regulatory policy issues and to formulate a
national agribusiness policy in consultation with all relevant stakeholders.

Stakeholders Involvement Plan

For execution of the initiatives taken by Agribusiness Development Services SMEDA
stakeholders from complete value chain will be involved in formulating Policy guidelines
and future plan of action for enhancement of capabilities of Agro SMEs in Pakistan.
Proposed stakeholders may include Farmers Associations, researchers at academia and at
research stations, different Government departments involved in policy making or
decision making process

6. SMEDA Projects:-
6.1 Women Business Incubation Center:-
Women Business Incubation Center (WBIC) is an initiative of
SMEDA being funded by Government of Pakistan to provide ‘hands-on support’ to
Women Entrepreneurs (WEs) in an exclusive female oriented environment. It is the first
of its kind center in Pakistan wherein, Offices, Exhibition/Display facility and Business
Development Services (including training programs) are being offered to Women
Entrepreneurs (WEs) under one roof. The entire effort is focused at encouraging new
business start-ups and support to existing businesses including the right environment for
nurturing women owned and managed businesses to an extent that these become
sustainable; more specifically, in start-up period (first five years) when they are most
vulnerable. WBIC is a supportive entrepreneurial community designed to help grow
small businesses. The center is established for providing assistance to home-based
businesses or those in earlier stages of development.

6.2 Industry Support Program:-

SMEDA initiated an Industry Support Program in 2003 for technical support of
different industrial sectors in Pakistan. SMEDA has collaborated with different
international organizations like Japan International Cooperation Agency (JICA) and
Gesellschaft für Technische Zusammenarbeit (GTZ). These organizations provide foreign
experts to enhance the capabilities and operational techniques of local industry in
different ways. For the success of these development initiatives an Industry Support Cell
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(ISC) at SMEDA has been established. The main objective of establishing this cell is the
capacity building of SMEDA staff and to ensure the continuity of different initiatives.
ISC consists of professionals who work closely with foreign experts for the development
and up gradation of local industry.

6.3 SME Cluster Development:-

Clusters are geographical concentration of enterprises which produce and
sell a range of related or complementary products and are, thus, faced with common
challenges and opportunities. Cluster development is basically supporting and
strengthening the clusters by creating networking among the stakeholders to reduce the
cost of doing business, bringing them on a single platform for more voice among policy
makers, create new business opportunities, reducing risk of doing business and capacity
building of the enterprises. Cluster development has also proved its contributing in
employment generation and poverty reduction worldwide.

6.4 Public Sector Development Programme PSDP:-

RS million
Sr. No. Name of the Project Location Total Estimated Cost
1 Gujranwala Business Centre (GBC) Gujranwala 98.78
2 Agro Food Processing Facilities (AFP) Multan 135.19
3 Sialkot Business & Commerce Center (SBCC) Sialkot 341.67
4 Women Business Development Center (WBDC) Karachi, Sindh 34.03


 http://www.smeda.org/index.php
 http://www.smeda.org/SMEDA-introduction_1.html
 http://www.smeda.org/opportunities/international-business-opportunities-
 http://www.smeda.org/business-development/business-guides.html
 http://www.smeda.org/business-development/pre-feasibility-studies.html
 http://www.smeda.org/services/training-services.html
 http://www.smeda.org/services/financial-services.html
 http://www.smeda.org/sector-development/dairy-sector-brief.html
 http://www.smeda.org/sector-development/gems-and-jewellery-sector.html
 http://www.smeda.org/projects/WBIC-women-business-incubation-
 http://www.smeda.org/projects/cluster-development.html

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