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One of the significant characteristics of a flourishing and growing economy is a booming

and blooming small and medium enterprises (SMEs) sector. Small and medium
enterprises play an important role in the development of a country. SMEs contribute to
economic development in various ways: by creating employment for rural and urban
growing labor force, providing desirable sustainability and innovation in the economy as
a whole .In addition to that, a large number of people rely on the small and medium
enterprises directly or indirectly.
Most of the current larger enterprises have their origin in small and medium enterprises.
SMEs are different from large scale enterprises in three main aspects; uncertainty,
innovation and evolution. The SME sector itself can be classified into micro enterprises,
small enterprises and medium enterprises. SMEs are the starting point of development in
the economies towards industrialization. However, SMEs have their significant effect on
the income distribution, tax revenue, and employment, efficient utilization of resources
and stability of family income.
According to the United Nations Industrial Development Organization UNIDO, for
developing countries, integration into the global economy through economic
liberalization, deregulation, and democratization is seen as the paramount way to triumph
over poverty and inequality. Important to this process, is the development of an animated
private sector, in which small and medium enterprises can play a central role.
SMEs have a propensity to employ more labor-intensive production processes than large
enterprises. Consequently, they contribute significantly to the provision of productive
employment opportunities, the generation of income and, eventually, the reduction of
According to the statistics, in industrialized countries, SMEs are major contributors to
private sector employment. Empirical studies have shown that SMEs contribute to over
55% of GDP and over 65% of total employment in high income countries .SMEs and
informal enterprises, account for over 60% of GDP and over 70% of total employment in
low income countries, while they contribute about 70% of GDP and 95% of total
employment in middle income countries.
SMEs play significant contribution in the transition of agriculture-led economies to
industrial ones furnishing plain opportunities for processing activities which can generate
sustainable source of revenue and enhance the development process. SMEs shore up the
expansion of systemic productive capability. They help to absorb productive resources at
all levels of the economy and add to the formation of flexible economic systems in which
small and large firms are interlinked. Such linkages are very crucial for the attraction of
foreign investment. Investing transnational corporations look for sound domestic
suppliers for their supply chains.
SMEs are the major growing force behind the fastest growing economy of China, in
terms of contribution to the national GDP (accounting for 40%), scale of assets,
diversification of products, and the creation of employment. Similarly, the role of SMEs
is well acknowledged in other countries such as Japan, Korea, and all other industrialized
economies in terms of creating employment, reducing poverty and increasing the welfare
of the society.
Experts and economists are unanimous about the role and importance of small and
medium enterprises in the development of Pakistan economy. The statistical data and
empirical studies about SMEs highlight the bulk share of SMEs in the economy.
According to the Small and Medium Enterprises Development Authority (SMEDA),
"SMEs constitute nearly 90% of all the enterprises in Pakistan; employ 80% of the non-
agricultural labor force; and their share in the annual GDP is 40%, approximately?.
There are a number of factors responsible for the importance of SMEs in Pakistan. First,
SMEs bolster an entrepreneurial spirit and put forward suppleness in the economy.
Second, SMEs emanate the fastest growing export sub-sectors, such as cotton weaving
and surgical instruments. Third, they can support the poverty alleviation endeavors
through employment generation process. Above all, SMEs are more efficient in resource
allocation as compare to that of large scale industry from a social point of view. They
provide and facilitate the more number of people as compare to that of large scale
It is levelheaded to say that Pakistan economy is an economy of SMEs. The significant
role of SME is plainly indicated by research and statistics. However, efforts had remained
restricted focusing on the large enterprises, and neglecting small and medium enterprises
which are the bone back of the economy. For instance, institutions established to
facilitate business activities, like Board of Investment (BOI), Export Promotion Bureau
(EPB), Central Board of Revenue (CBR), etc, have been focused their efforts on large
scale industry.
SMEs are a distinctive mainstay of the economy that requires owing attentiveness. The
evidence shows that small firms are discriminated against relatively large firms. Large
scale firms can cope and solve their hurdles due to possessing sound experience and
financial position. SME due to their small size and the resulting peculiarities, are far less
capable of adjusting and carrying on successful business. While spared direct statutory or
administrative discrimination, SME remain subject to unequal treatment, which distorts
the competitive environment for business.
There are also some hidden and apparent obstacles in the path of growth of small and
medium enterprises in Pakistan. The most important are; political instability, law and
order situation, financial constraints, energy crisis, taxation problems, labor issues, lack
of coordination and regular information exchange mechanism among institutions, etc.
What it requires is to pursue the precise policy and regulatory reforms to turn SMEs into
an effectual instrument for the enhancement of economic growth and employment.
Furthermore, the milieu for SME is incessantly changing, especially in the scenario of
globalization and openness of the economies. Therefore, the course of action for SMEs
should be set for long-run period keeping in mind the predictable behavior of all

Pakistan has emerged as the second rapidly growing economy in Asia after China in 2004
– 2005, as claimed by government and well accepted by international raters and financial
institutions. According to Economic Survey 2004-05 this increase in real GDP is the
courtesy of robust performance of large scale manufacturing and services sector. Even
though the large scale manufacturing registered 15.4% growth but small and medium
enterprises (SMEs) is the core issue in the country’s progress and especially for the
prosperity of masses that are surviving with low scale income due to which Pakistan
ranks 135th out of 174 countries on Human Development Index.

When we think about SMEs, we consider it as one person manufacturing enterprise but
according to SMEDA Small Enterprises should possess ten to thirty five employees with
two to twenty million rupees capital intact in equity. Medium Enterprises should possess
thirty six to ninety nine employees with twenty to forty million capital intact in equity.
Here we have to see the role SMEs have in the progress and well being of masses in

The assessment of the role of SMEs in Pakistan is of vital importance. Sometimes we

have shinny figures and data regarding economy like GDP growth or per capita income
but these can be misleading because the earners of these massive growth are not masses
but the capitalists in the country. SME produces the income stream for masses located in
the countryside and the capitalists associated with this activity that is generally medium
or small as the name suggests.

In Pakistan SME sector is not only the minor sharer till yet, reality is that Pakistan’s
whole economy is highly dependable on the pace and productivity of SMEs. Out of
Pakistan’s 3.2 million enterprises 95% are those who possess 99 employees in private
industrial sector and employ about 78% of non agriculture labor force. SME contributes
25% export of manufacturing goods and 30% of GDP is the outcome of business efforts
of SMEs.

The vital question is not “what SMEs have produced?” But, what they are capable to
produce? The simple answer is if they produce on their full potential and capacity
Pakistan would be way ahead on economic racetrack of the world. They can produce
billion of dollars worth items that is why SMEDA is quite right in stating its mission as
“Turning potential into profits”. Turning potential into profits gives us a truer and fair
picture of the role of SMEs in Pakistan. Now we will see what potential we have and the
threats associated with it and how we can turn potential into profits by overcoming
existing threats.

Firstly we have to talk about the main potential we have to boost the progress and
efficiency of SMEs. The real potential of SME growth in the country is the deprived
people of this country who are quite keen to raise their standard of living. It simply
means the future of SMEs is associated with the temptations of highly talented but
deprived masses of Pakistan and their will to turn their dark days in to glittering ones. But
the real problem associated with their will and dreams is finance and technical assistance.
Financing concerns have two issues; first is availability of finance and second is the rate
plus the terms on which the finance is available.

Financing SMEs in heavy liquidity period for banks is not a burden but an opportunity
because bank can utilize their liquidity by advancing finances to SMEs. By advancing to
SMEs they can have two advantages. First when they advance to many small and
medium enterprises as compare to large ones, their lending amount will be distributed to
a number of clients that will increase the probability of recovery. Secondly, the
contribution in national economic growth via utilizing their liquidity that is excess due to
great activity in economy in the period after 1999 and especially after 2001 that will
further expand the activity in banking sector in near future.

Exploring a specific niche product is another way to boost SMEs sector. Niche is a
unique product that we can produce at low cost with an absolute advantage. In Pakistan
we are producing Niche from Wazirabad by producing the international quality surgical
instruments and Saialkot is there for sport goods. SMEDA and other concerns like EPB
have to come up to explore more niches that are sure available in this country of highly
skillful workforce. In this regard Prime Minister’s program of ONE VILLAGE ONE
PRODUCT is of high importance. Even we could not achieve economy of scale through
this niche but available glittering demand in international market can offset the cost
burden and causes the inflow of foreign exchange.

The movement of masses from rural to urban areas is another hot slot of the time. While
developing a well integrated SME sector in the country, it is the clear cut advantage that
we can stop this mobilization that certainly is creating the urban problems and increasing
the urban development overheads and cost of maintaining big cities like Karachi. Even it
will be a factual probability that through SMEs we can convert our villages into new
towns and sources of revenue and progress.

Stock markets in the country are in deprivation of number of newly listed companies; I
think it is for the sake of well being of stock markets and SMEs that SMEs should be
authorized to get listed in shape of a venture of 3 to 5 SMEs on stocks on relatively
smaller amount of capital that is how the SMEs could muster the very capital and while
becoming a part of corporate culture that can give way for them to have good
management. In early stages the board of SME companies (as they would not be able to
pay handsome amount to experts) should consist of experts of Federal, Provincial
governments and specialized financial institutions and the small and medium enterprises.
Small and medium entrepreneurs should possess the majority shares and the shares of
these stakeholders have to be to the extent of their support and inline to compensate
nominal through the profitability of the companies.

SMEs will be the main source of poverty reduction in Pakistan that will create the value
and innovation for the country in the days to come. The thing that really needs serious
attention is to remove the unnecessary bureaucratic procedures. It is essential to make it
possible that the opportunities for small entrepreneurs should not be wasted through
excess processing of finance applications or other official terms. Assistance to SMEs is
not enough; the government and specialized financial and technical institutions should
stand as partners of small and medium entrepreneurs, this is the only way that the
financial institution can recover their funds with yield. Government could achieve its goal
for poverty reduction, economic progress and above all the value creation process by
promoting the culture of SMEs. This is the only way that can make sure the poor masses
of Pakistan shall not live poor anymore.


This lecture is about the history of industrial growth in Pakistan and its related factors;
the factors for adopting an SME based industrial system, the institutional support of
government in the shape of long term and short-term policies.

The Development of SMEs in Pakistan

The Industrial History of Pakistan

Pakistan’s industrial history has been dominated by a single-minded emphasis on

industry and that too of large-scale enterprises. The fall out of that development strategy
was formally adopted in the 60’s as conscious policy step in the start of second policy
plan period (1960-1965) has been large scale industrial holdings, accounting for much of
the country’s assets and capital. The feeling among the masses is that a few families
control 70 to 80 percent of the country’s assets, led to political rebellion. That rebellion
also culminated in the dismemberment of the eastern part of the country. The primary
causes for that tragedy, were basically economic in nature. The upheaval also generated a
parallel economic thought, exclusive to the peculiarities of Pakistan’s economy. That
economic thought advocated across the board nationalization of economic assets as a
vehicle for ensuring social justice in the society.
The fall out of that strategy was two pronged:

• Inefficient labor

• Shaken Business Confidence.

The reaction to that policy mix in the early 1980’s was reverting to the Ayubian model of
economic development. The model was characterized by:

1. Promotion of large-scale units.

2. Expansion of large-scale enterprises.

3. Banking sector turned to cater to large loans.

The IMF conditions and poor recovery rate of huge borrowings played a major role in
creating a negative point for the progress curve. These constraints further pushed the
economy towards recession, industry towards sickness and individual units towards
default. All these factors precipitated the rethinking of a strategy to revive the growth of
economy. It was due to dis-involvement that medium scale and small-scale enterprises
has got the attention of the stakeholders i.e. the economic managers and the private
sector. The development of SMEs suits the current situation on account of the following

1. Low overhead cost, low level of financing

2. Lesser pressure on the banking system

3. Employment generation

4. Entrepreneurial development

5. Vendor based development

6. Development of large-scale industry on firm basis

7. A more just distribution of resources and profits

The pre-requisites for the development of SME sector rest heavily on an infrastructure
tuned to support such development that includes:

A banking system customized for SME development

One window operation

Currently, our banking system continues to be the large sector banker. Despite talk of
SME development under the auspices of SMEDA and development of SME Bank and
Khushali Bank, the financial sector’s general response has been influenced by the
security issue, i.e. against which asset the bank would be advancing loans to the small
and medium scale business entity. In the absence of a customized banking setup, the
development in the SME sector so far has been evolutionary and not the result of any
conscious activity.

The turning up of the system for development of the SME also includes an enabling
environment. Though the need for an enabling environment is not exclusive to the SMEs
and is a pre-requisite for all types of economic activity. That includes a one-window
operation culture, where the investor does not have to go from pillar to post to get his task
done. A conscious effort by the state to reform the banking setup and the attitude of the
government functionary and the bureaucracy will set into motion the mechanics of
change in the development strategy priorities of our economy.

The development of SME hold within its mechanics of expansion the growth of economy
coupled with a more just distribution of wealth. The social justice aspect of it ensures that
the development will not compromise the distribution of wealth issues. To begin with, the
SME development does not depends upon the expansion of the family enterprises; rather,
it is the outcome of the initiative of the single individual or asset of individual. Unlike the
development of family concerns, where the emphasis on the particular group’s interests,
the SME never seeks to totally control the market, rather, it only identifies its place in the
market and sustains it. The modus operandi of most of the vendors in the auto sector is
like this. They do not control a major chunk of the market. What they are doing is to
maintain their share as a sustainable vendor. Thus the market is not blocked for the new
entrant unless there is saturation point already experienced by the industry.

The small overheads involved in fixed and running cost structure of a SME unit means
that each unit does not need excessive financing. As a result a large section of society
benefits from the available resources. There is no accumulation of wealth in few hands
and the money circulates in a fashion, where people are able to derive the needed benefit.

The availability of resources for the SME unit means that the opportunity to develop are
not confined to a restricted section of society, rather anyone with a idea and plan can
create a place for himself. The success of venture capital in the United States and the
likes of Yahoo and Hotmail are indicative of the development of SME as a vehicle for
equal opportunity, besides technological development. The other success stories like
Microsoft, Linux owe their development to the practical implementation of the idea,
which was presented by individuals or a set of individuals with not so privileged
backgrounds. Yet they made it big. Bill Gates was not a Kennedy scion, but the
opportunity to develop from a SME allowed him enough room. Even today, developers
jointly own Microsoft. In the process the above-mentioned advantage of technological
development as also been realized.
A more just distribution of wealth and prospects of technological development set the
pace for the growth of economy. New technologies generate economic activity on
industrial scale. That is not exclusive to developed countries. We have experienced in the
context of the Information Technology that it did generate economic activity in the
affiliated sectors and provided employment opportunities to many hardware engineers
and software developers. The development of IT sector had a more egalitarian character
to its credit allowing professionals to prosper, without having to be a large enterprise or
scions of big families.

The recipe of SME development infects does two things. On one hand the processes are
developed at a grass root level. Vendors are identified and the production process takes
off. As small-scale vendors characterize most of the development, the profits are
naturally divided according to the contribution to the process. There are no new big
families appearing in the process, rather, it is the matter of fact stages of production line,
which are identified. The Japanese and Italian economies are increasingly modeled on the
basis of SME development. These societies are characterized by the dignity of work, not
for the huge amount of sweat, the worker sheds, but for the rewards, which are ensured in
this setup. The vendor knows the respect he earns and the rewards he is insured. For that
very cause, peace and almost no records of militant trends have characterized the
developed societies like Japan.

The debate in the support of the SME can be unending. The prescriptions for the societies
and economies like Pakistan in the context of the best possible economic solution are
simple. There is a need to retune the priorities of the state, if the results are to be realized,
in the absence of which our efforts would remain devoid of any tangible results.


1. Small and Medium enterprises development (A recipe For development and just
distribution) A research paper by SMEDA Research cell

2. The A to Z of healthy small business by Amer Qureshi (international edition Australia)

3. 3-50 years of Pakistan’s economy (traditional topics and Contemporary Concerns by

Shahrukh Rafi Khan (Oxford Press)

tate of SMEs in Pakistan

In the industrial development of a country the importance of the SME sector cannot be
overemphasized. SMEs constitute nearly 90% of all the enterprises in Pakistan; employ
80% of the non-agricultural labor force; and their share in the annual GDP is 40%,
approximately. However, unlike large enterprises in the formal sector, a small and
medium enterprise is constrained by financial and other resources. This inherent
characteristic of an SME makes it imperative that there should be a mechanism through
which it may get support in different functions of business including technical
upgradation, marketing, financial and human resource training & development.

SMEDA is the flagship organization of Pakistan which is providing the necessary

services to help SMEs overcome the weaknesses that are endogenous to their very nature.
It is an autonomous body working under the umbrella of the Ministry of Industries &
Production and contributes towards the growth and development of SMEs in Pakistan

(i) the creation of a conducive and enabling regulatory environment;

(ii) development of industrial clusters;
(iii) and the provision of Business Development Services to SMEs in all areas of business

Adhering to a clear mandate and a logical path to achieve quantitatively verifiable targets,
SMEDA carries out comprehensive analyses of international trends, national policies and
other macroeconomic factors affecting SMEs in Pakistan for a gradual progress towards
the creation of a favorable business environment for its key clients – the SMEs of
Pakistan. At the same time, we also interact with the SMEs working in industrial sectors
such as Agriculture, Fisheries, Textiles, Handloom Weaving, Transport, Leather, Marble
& Granite, Carpets and Light Engineering. This interaction takes place at the individual
as well as collective level to provide proactive and responsive financial, technical,
management and marketing services to SMEs.

At the collective level SMEDA addresses the problems and needs of SMEs in the form of
an industrial cluster – a concentration of largely homogenous enterprises within a certain
geographical area. SMEDA interacts with the stakeholders operating in such clusters on a
regular basis and collects first hand information about their problems and needs. During
this interaction, the issues are prioritized and the important problems are selected for
detailed working through which the projects/programs are identified.
SME support through cluster development program is provided on two fronts:
1. Regulations and policy level support
2. Institutional & networking support

In the policy level support, problems related to any Government department or

Government policy/regulation are studied and, if found valid, are advocated with the
concerned authorities. At the institutional level, SMEDA provides support to SMEs by
creating networking amongst the concerned stakeholders or by directly starting
development projects in the clusters. Such projects may include establishing a training
institute, building a common facility centre, building a model plant with state-of-the-art
technology for SMEs to emulate through reverse engineering. These projects also include
upgrading technology in a particular industrial sector and starting a program-lending
scheme for this purpose in collaboration with the financial institutions.
Up to now, SMEDA has been involved in cluster development projects in the areas of
Boat Modification in Marine Fishery Sector, Credit for Auto Vendors, Carpet Weaving,
Marble & Granite, Dates & Apples Processing, Wooden Furniture, Leather Garments,
Ceramic Kilns, Cotton Ginning, and Glass Bangles Cluster.
Some of the important cluster development projects undertaken by SMEDA are:

1. Ginning Technology Up-Gradation
2. Program Lending For Power Looms
3. Computer Aided Design Centre (Common Facility Centre-Sialkot)
4. Designing Institute for Garments (Peshawar)
5. Accessories Sector Study
6. Development of Handloom Cluster

Horticulture/Fruits and Vegetables

7. Establishment of Cool-Chain Agriculture Export Processing Zone
8. Fruit Processing Facility (NWFP in Collaboration with EPB)
9. Assistance to Set Up Horticulture Export Board
10. Revitalization of Sunflo Cit-Russ for Citrus Cluster Development.
11. Apple Treatment Plant in Balochistan (Co-Ordination with EPB)

12. Program Lending Boat/Engine Modification, Gwadar District
13. Establishment Of Shrimp Farms
14. Fish Processing Facility In Gwadar (Feasibility Study)
Granite & Marble
15. Export Warehouse Marble (Azakhel NWFP)
16. Establishment of Model Quarry and Training Institute Marble
17. Joint Ventures and Technology Transfer Arrangements (NWFP)

18. Five New Gem Mines To Be Operationalized (NWFP)
19. Lapidaries Program Lending (NWFP)
20. Glass & Ceramics
21. Ceramics Kiln Up-Gradation: Common Facility Centre, Gujrat
22. Sanitary Ware & Pottery Sector Kiln Up-Gradation
23. Bangles Kiln Up-Gradation (Hyderabad)

24. Agri-Mall – One Stop Shop for Agriculture Inputs
25. Support Services for Agricultural Credit (SSAC)
26. Establishment of 3 Private Sector Warehousing & Trade Promotion Facilities in

The third area of SMEDA’s functioning is the provision of Business Development

Services to SMEs. For this purpose we have set up Helpdesks in all four of our regional
offices where any SME in need of SMEDA’s services can simply walk in and obtain over
the counter products such as Project Briefs, Pre-feasibility Studies and Regulatory
Procedures, along with advice on specific problems. SMEDA Helpdesk Services include:

Assistance in Raising Finance.

Financial Advice.
Project Identification.
Business Plan Development.
Technical Advice.
Marketing Advice (Branding, Labeling, Packaging, Distribution, Promotion, etc.)
Company Incorporation, Export Registration, & Regulatory Advice.
Sales Tax, Custom Duty, Excise Duty, etc.
Electronic Commerce Support.
Business Matchmaking.
Accounting & Bookkeeping Services.
Information Services (Library, Databases, Project Briefs, Pre-feasibility Studies, Business

As a part of its Business Development Services, SMEDA also provides Human Resource
Training services by conducting extensive training need analysis of different SME
clusters. SMEDA has so far conducted more than 230 training courses and workshops
focusing on developing sector specific skills.

SMEDA, envisions to become a model of public-private partnership for better facilitation

of the small & medium enterprises in Pakistan through the creation of a more equitable,
transparent and conducive regulatory environment for the businessmen. SMEDA believes
in synthesizing home-grown solutions to the problems of SMEs, based on global
information and local wisdom achieved through cross-country analysis, experience of
indigenous entrepreneurs and constraints of the government.

SMEDA Offices

SMEDA Services
Consultant Database Facility
Training Services
Business Plan Dev.
Financial Services
Information Resource Centre (IRC)
Policy and Planning
Intellectual Property for Business Success
Legal Services

Business Development
Pre-feasibility Studies
Regulatory Procedures
Sector Briefs
SMEDA's Publications
Commercial Contracts Templates
Guidelines for SMEs on Compliance and ISO Certification

SMEDA Projects
Women Business Incubation Center
Public Sector Development Programme (PSDP)
Industry Support Program
SME Policy Development
Industrial Information Network (IIN)
Cluster Development

Sector Development
Dairy Sector (brief)
Gems & Jewellery Sector
Agribusiness Services

Business Opportunities
International Business Opportunities
Business Matchmaking

What Are SMEs

As defined by State Bank of Pakistan - SME (Small and Medium Enterprise) means an
entity, ideally not a public limited company, which does not employee more than 250
persons (if it is manufacturing concern) and 50 persons (if it is trading / service concern)
and also fulfills the following criteria of either ‘a?and ‘c?or ‘b?and ‘c? as relevant:
(a) A trading / service concern with total assets at cost excluding land and buildings up to
Rs 50 million.
(b) A manufacturing concern with total assets at cost excluding land and building up to
Rs 100 million.
(c) Any concern (trading, service or manufacturing) with net sales not exceeding Rs 300
million as per latest financial statements.

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Significance of SMEs

SMEs are considered the engine of economic growth in both developed and developing
countries, as they:
Provide low cost employment since the unit cost of persons employed is lower for SMEs
than for large-size units.

Assist in regional and local development since SMEs accelerate rural industrialization by
linking it with the more organized urban sector.

Help achieve fair and equitable distribution of wealth by regional dispersion of economic

Contribute significantly to export revenues because of the low-cost labour intensive

nature of its products.

Have a positive effect on the trade balance since SMEs generally use indigenous raw

Assist in fostering a self-help and entrepreneurial culture by bringing together skills and
capital through various lending and skill enhancement schemes.
Impart the resilience to withstand economic upheavals and maintain a reasonable growth
rate since being indigenous is the key to sustainability and self-sufficiency.

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Problems Faced by Pakistan’s SME Sector?

Pakistan 's economy has amazing potential for development but sadly, we haven't been
able to derive optimal benefits despite a series of efforts launched by various policy
makers at different times. The impetus of all these endeavors was on the large scale
industries and manufacturing concerns. High rate of failures, owing to economic slumps,
institutional malpractices, political motives and damaging activities of labour unions in
that sector, left the formal lending institutions with huge infected portfolios, in addition to
adverse effects on the entire economy e.g. insufficient and low quality production to meet
the demands of local and international markets, deficit in balance of payments and ever
rising unemployment, etc.

Pakistan 's SMEs are still unable to achieve their maximum potential and are in dire need
of ‘hand-holding' and business support services.

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SME Financing and Hand-Holding

Research reveals that despite the lack of collateral, SMEs are a better credit risk, as the
default rate of this sector is much below that of large enterprises (LEs). Throughout the
world, SMEs have provided tremendous opportunities to financial institutions to design
various tools for the sector's development (e.g. Program Lending Schemes, Credit
Scoring, Venture Capital Financing, etc.). Then there are clusters, technology parks and
industrial estates, all being fuelled by the dynamism and vibrancy of small and medium
enterprises. Banking institutions, running on Islamic principles, are also experimenting
with interest free financial instruments (e.g. Mudarabah, Murabaha, Ijarah etc.) for this