A Research Report on the Role of Pakistan's Government in SME Growth

This report provides an in-depth analysis of the role of the Pakistan government in the development and growth of Small and Medium Enterprises (SMEs). It begins by highlighting the significant contribution of SMEs to Pakistan's GDP and employment. The report then delves into the various issues faced by SMEs, including lack of access to information, inadequate technology, and unfavorable government policies. It further explores the root causes and problems hindering SME growth, such as geographical isolation and reliance on SMEs for employment generation. The study examines the government's multi-pronged approaches at regional, sub-regional, and public levels to support SMEs, including initiatives to strengthen financial coordination and restructure the production base. It also discusses the role of organizations like SMEDA and NAVTTC in providing technical skills and financial assistance. Finally, the report outlines various solutions and policies proposed by the government to resolve the issues of SME growth and development, such as education sector reforms, tax administration reforms, and microfinance sector development programs.

Research Methods

Table of Contents
Title of the Study ............................................................................................................................1
Introduction .....................................................................................................................................1
Background of the Research ......................................................................................................1
Rationale of the Research ...........................................................................................................1
Research Aim and Objectives .........................................................................................................2
Literature Review ............................................................................................................................2
Different issues faced by SME’s while operating their business within Pakistan......................2
Identify the root causes and problems occurring in the growth of SMEs...................................3
Role of Pakistan government over the growth of SMEs.............................................................3
Different solution and polices government proposed to resolve the issues of SMEs growth and
development................................................................................................................................4
Research Methodology ...................................................................................................................5
Research Approach: ...................................................................................................................5
Data Collection Tools: ..............................................................................................................6
Research Sampling: ....................................................................................................................6
Ethical Consideration .................................................................................................................9
Data Analysis..............................................................................................................................9
REFERENCES..............................................................................................................................10

Title of the Study
ROLE OF PAKISTAN'S GOVERNMENT IN SME'S
Introduction
Background of the Research
The study aims to analyse the job of Pakistan government in the development and improvement
of Sme's. subsequently, SME's mostly adds to around 55% of GDP and more than 65% of the
total work in the top level salary nations. Small and medium size business and the casual
business, represents more than 60% of the GDP and around 70% of the entire work in the low
pay regions, while they essentially offer over around 95% of the whole business and around 70%
of GDP in the center pay. The public authority of Pakistan basically considering in the view the
meaning of SME's that has executed multi-pronged methodologies at the regional, national and
sub-regional levels. Consequently, the inceptions at the local and sub-territorial levels includes
endeavors to reinforce financial coordination and the participation (Alkahtani, Nordin and Khan,
2020). Also, on the public level the underlying change programs have been in the activity
alongside the efforts to rebuild and broadening the creation base, coordinating the casual section
inside the monetary standard and animating the created interest at the undertaking level. From
the previous few decades, the public authority of Pakistan has fostered a wide space of
organization of various help establishments for the development and advancement of SME's in
the country. The development method was viable started in the sixties and the idea of the
development mostly got its starting point from the Indian Model of independent company
ventures improvement. The Government of Pakistan (GOP) has industrialized arranged
organizations, including "SMEDA" and "Public Vocational and Technical Education
Commission" (NAVTAC), giving specialized abilities and money related help, while a few
banks (The State Bank of Pakistan, Khushhali Bank, and BOK) helps for the monetary
advancements of SME's. therefore, the government has putting significant efforts in developing
policies and the financial support for the SME’s to grow within the market to gain growth and
development.
Rationale of the Research
The primary purpose of undertaking current research is to evaluate the role of Pakistan
government on SME's development and their growth. This is one of the major concern for
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researcher to analyse the actual impact of government over the SME's and its development at
market place. Along with this, research also provide assistance in enhancement of skills and
knowledge regarding how government of Pakistan take initiates and develop policies for
development of SME's. This will directly contribute in improving economic condition of
specified country (Arshad and et. al., 2020). In context to researcher, this study also provide
assistance in future development in this specified area by enhancing investigator skills and
knowledge through which researcher can easily undertake future research in same area of
interest. It may assist in acquiring reliable and valid information through which researcher can
easily draw a valid conclusion and make overall study more authentic.
Research Aim and Objectives
Research aim:
The present mainly aims to render an in-depth analysis of SMEs in Pakistan and what
role of government has play in the development of SME business. Moreover, the study initiated
to study all the issues and hurdles that are widely being faces by the SME’s and also affects their
functionality. In addition to this, the study is also highlights proposed policies and initiations that
are considered by the Pakistan governments to resolve the issues of SME’s. The suitable aim of
the study is “To investigate the role of Pakistan’s government in SMEs and its overall
performance”.
Research objectives:
 To determine the different issues faced by SME’s while operating their business within
Pakistan.
 To identify the root causes and problems occurring in the growth of SMEs.
 To analyze the role of Pakistan government over the growth of SMEs.
 To examine the different solution and polices government proposed to resolve the issues
of SMEs growth and development.
Literature Review
Different issues faced by SME’s while operating their business within Pakistan
According to ARSHAD and et. al., (2020), SMEs are seen as the foundation of the
Pakistani economy. In the business sector, they utilize up to 90% of every private venture and
practically 78% of the workforce from the non-farming area. Other than giving out 36% worth
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expansion in the manufacturing products, their commitment is around 40% in GDP, and they
contribute 30% offer in the exports of made items. principle issues thwarting execution of SMEs
in Pakistan incorporate deficient wellsprings of getting outer information, absence of innovation
activities, horrible government strategies, high dangers because of vulnerability, need of
intellectual assets, inadequate institutional help, absence of reasonable business strategies
reception, and just as the negative business climate. In addition to this, another imperative looked
by the SME area is the low degree of innovation and the absence of specialized and
administrative abilities. The low degree of innovation has directly reduced the advancement
exercises and functional productivity of the SMEs. The insufficiency in scholarly abilities
diminishes the capacity to go up against the opponents. numerous SMEs in Pakistan don't have
the scholarly abilities and relevant educational foundation to deal with their organizations. These
influence their capacity to do effective control and arranging. Some SME proprietors utilize the
advances acquired for the business for individual use.
Identify the root causes and problems occurring in the growth of SMEs
As per view point of Bilal and et. al., (2020), independent companies find that their
topographical separation places them in a predicament. Despite these liberal blocks various
economies remain overwhelmingly subject to SMEs, particularly for business age.
Notwithstanding their obvious deficiencies SMEs have not been cleaned up with the
collaboration of globalization and regional blend, regardless, rather, their work and responsibility
have changed and created which have enabled various to remain generally merciless what's
more, all things considered be a huge wellspring of business age.
Role of Pakistan government over the growth of SMEs
According to Dar, Ahmed and Raziq, (2017), The public authority of Pakistan keeping in
see the significance of SMEs has embraced multi – pronged approaches at the territorial, sub
local and public levels. Drives at the provincial and sub-local levels include enterprise to
reinforce financial coordination and collaboration. At the public level, structural adjustment
programs have been in activity alongside undertaking at rebuilding and enhancing the production
base, incorporating the casual area into the monetary standard and invigorating the increased
cooperation at the undertaking level. Along with this, throughout the long term the public
authority has fostered a wide organization of various help foundations for the development of
small business organization in the country. The improvement cycle was started in the sixties and
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the idea of advancement got its starting point from the "Indian Model" of little enterprise
development. The fundamental thought behind the model is to foster framework offices, for
example, industrial estates, normal office places and professional preparing organizations, which
would, generally the problems looked by the SMEs. ME 's adds to over 55% of GDP and over
65% of supreme work in big time pay countries. SME 's and easygoing undertakings, address
over 60% of GDP and over 70% of total work in low-pay countries, while they offer over 95% of
complete business and about 70% of GDP in focus pay countries. Little and medium-sized
endeavors (SMEs) are non-partner, self-administering firms which use under 250 number of
representatives in Pakistan or having settled up capital up to Rs.25 million and arrangements up
to Rs.250 million for every annum.
Different solution and polices government proposed to resolve the issues of SMEs growth and
development
As per view point of Hassan and et. al., (2018), SME are an unmistakable mainstay of the
economy that should be given due consideration. It requires explicit approach and administrative
space to turn SME into a powerful apparatus for driving the economy and progressively add to
monetary development and work. Furthermore, SMEDA was shaped to beat the obstacles
experienced by SMEs in Pakistan. Having a talented administration and intense methodology,
the accentuation of SMEDA is to convey business development and extension administrations to
SMEs. SMEDA works with different financial backers to zero in on the plan of SME
progression. The banks essentially tackle the monetary issues; independent companies are
offered sponsored advances through the SMEs' bank instead of enormous partnerships n
expansion to advances, funding is likewise given to SMEs to put in new and innovative
machinery toward the beginning of their business professions. With help from UK Department
for International Development, SBP has begun credit guarantee plans for SMEs in country
districts. The National Vocational Technical Training Center (NAVTTC) was set up in
December 2005 to give specific and expert getting ready to everyone to update SME's capacities
improvement (National Vocational Technical Training. This will assist SME's in enhancement of
their growth and also make a strong economic of Pakistan by generating number of employment
opportunities in-front of local people. In addition to this, government of Pakistan has developed
effective strategies for development and growth of SMEs are as follows:
 Education Sector Reforms 2001-05
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 Reforms in Tax Administration
 Micro Finance Sector Development Program
 Poverty Reduction Strategy Paper
 Reform of financial sector
Research Methodology
Research methodology mainly defined as the specific process or tool which is implemented
to identify, chose, process and evaluate the data concern with the specified investigation area.
This section is effective in providing suitable support to the investigation via selecting the most
suitable applications to aid the work in right direction (Hussain, Shahzad and Hassan, 2020). In
the case of this present investigation work, based on the aspect of study the role of Pakistan’s
government in SMEs and its overall performance, suitable section of sources providing value in
reaching the significant outcome, the effective methodologies for this study are associated as
under:
Research Approach:
It is related with the concept plan and the procedure that researcher have used for broad
assumptions to detailed methods including data collection, analysis and interpretation in order to
make a justify results. Basically, it is divided into two types of approaches including quantitative
and qualitative research methods. Both are play a crucial role in gathering detailed and genuine
information that help with reaching a legitimate determination toward the finish of the
examination. To embrace momentum examination, quantitative exploration will be used by
investigator that provide reliable and measurable data. Current research is based on the role of
government on SMEs growth and development. In this, various issues to be evaluated and
addresses that consist absence of assets, ill-advised monetary help, absence of access of
information and mindfulness, political reforms and at the same time policies and remedies to
resolve all these issues is also includes. In order to obtain data over the desired objectives,
investigator will require qualitative data (Ikram and et. al., 2019). Along with this, the estimated
resources for SMEs includes latest equipment and technologies which will be acquired through
various SMEs. In order to analyses as well as evaluate data, researcher required overview of all
the previous statistics on the basis of resources provided to SME’s. In this, using data from
government departments associated with SME development. The main focus of this research is
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to acquire information based on the remedies implement by government for SMEs growth and
development.
Data Collection Tools:
The collection of information is the most suitable tool to aids the investigation in right
manner, therefore, the selection of sources is mainly encompassing over two sorts i.e. primary
and secondary sources of information accumulation. In the case of this existing study, relay over
the area of investigating the role of Pakistan’s government in SMEs and its overall performance,
both primary and secondary sources will be considering by the researcher to gather suitable
information (Khan, Raziq and Ghouri, 2019). The primary study will be effective in gathering
specific information that are only relay over the chosen study area, as here information collection
will be encompassing over implementing online survey with the support of executing
questionnaires which designs close ended questions, in that the participants has to choose the
participants from the selected set of options. Therefore, the questionnaire is categorized on the
ground of gathering information from the SME’s and the government officials. Thus, the
questionnaire will be present in google form and the links of forms will be send to the chosen
participants on their contact detailed via email, social media accounts and so on. Furthermore,
the participants will fill the form and the responses will be gather by the researcher to analyses
the views and generate significant results. This is the more suitable way then interview as this is
the most time consuming tool and needs prior approval from the SME’s personals and the
government officials to gather information. Whereas, online survey will be supportive and less
time consuming in nature and also avoid physical interaction and data can easily be gather via
executing telephonic or media options. On the other hand, secondary sources like books,
journals, articles, online sites and published and non-published materials based on the aspect of
analyzing the role of Pakistan’s government in SMEs and its overall performance, are effective
in developing literature review in more liable manner to support theoretical framework.
Research Sampling:
It is huge for examiner to choose a right example size from the bigger population fully
intent on procuring substantial data based on indicated research point and region. Basically,
researcher will use convenience sampling method as it helps in collecting market research data
that assist in acquiring reliable information on the basis of research topic (Manzoor, Wei and
Sahito, 2021). In addition to this, researcher also select two different samples for current study
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one from facing issues and another one is offering remedies for SMEs development and growth.
As SME’s are play a significant role in economic growth for Pakistan and the government focus
on all the issues faced by SME’s and also ensure to make appropriate policies through which
SME’s can attain growth at wider market place.
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8
NAME YEAR LOCATION
PAC Group of Colleges
(Education Management)
1987 Lahore
SBT Japan
(Automotive)
1993 Karachi
Hawks Engineering Services
(Automotive)
1988 Lahore
One Door Technologies
(Telecommunications)
2006 Rawalpindi
Taiga Apparel
(Textiles)
2004 Lahore
AffordIT Limited
(Information Services)
2016 Karachi
Energy Green Insulation
(Construction)
2015 Faisalabad
MW Tech
(Information Technology and
Services)
2013 Rawalpindi
MangoBaaz
(Entertainment)
2015 Lahore,
Flattech
(Information Technology and
Services)
2014 Lahore
Proton Defence Motors
(Automotive)
2021 Lahore
Pulp Consultants (SMC - Private)
Limited
(Financial Services)
2020 Karachi
Firetech Electronics
(Electrical/Electronic
2020 Islamabad

Ethical Consideration
Ethics are the key aspect of the investigation to effectively be consider by the researcher to
execute the study in most reliable manner. Therefore, there are assorted ethics like respect for the
persons, confidentiality and data protection, conflict of interest, technical error and so on, that are
needs to be considered at the time of executing the analysis. Researcher needs to be concern over
managing the autonomy of the study as the requires to guarantee their respondents of not asking
any question that hurts the emotion and sentiment of the participants (Raza and et. al., 2018).
Furthermore, the investigator needed to ensuring the investigator about the safety and security of
the personal information via managing the confidentiality of their private information. As well as
the researcher also implementing password protected software’s to keep the private data safe.
Technical error is the major concern in this study as primary information will be gather via
online survey and the authenticity of sources and the suitability of link is required to gather
specific information.
Data Analysis
In undertaking research activities, data analysis is an effective technique of assessing,
purifying, displaying and changing information to find valuable data that contributes in making a
substantial determination toward the finish of the investigation. Under this study, researcher use
SPSS version 20.0 for analyzing data (Zafar and Mustafa, 2017). Along with this, descriptive
statistics is also assist in analyzing composition of sample. As quantitative examination study is
likewise used to investigations information by embraced exploratory factor examination,
independent t-test, correlation analyses, confirmatory factor analyses, ANOVA, reliability
analyses, AMOS model fit and many more to analyses collected data in an appropriate manner.
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REFERENCES
Books and journals
Alkahtani, A., Nordin, N. and Khan, R.U., 2020. Does government support enhance the relation
between networking structure and sustainable competitive performance among
SMEs?. Journal of Innovation and Entrepreneurship, 9(1), pp.1-16.
Arshad, M. Z., Ahmad, M. J., Ali, M., Khan, W. A. and Arshad, M.H., 2020. The role of
government business support services and absorptive capacity on SMES
performance. International Journal of Advanced Science and Technology, 29(3),
pp.1492-1499.
ARSHAD, M.Z., Khan, W., Arshad, M., Ali, M.A.J.I.D., Shahdan, A. and Ishak, W., 2020.
Importance and challenges of SMEs: a case of Pakistani SMEs. Journal of Research on
the Lepidoptera, 51(1), pp.701-707.
Bilal, M., Fatima, S., Ishtiaq, M. and Azeem, H.M., 2020. Factors affecting the choice of Islamic
banking by SMEs in Pakistan: Implications for Islamic banks' corporate
governance. Pakistan Journal of Commerce and Social Sciences (PJCSS), 14(1),
pp.255-272.
Dar, M.S., Ahmed, S. and Raziq, A., 2017. Small and medium-size enterprises in Pakistan:
Definition and critical issues. Pakistan Business Review, 19(1), pp.46-70.
Hassan, M.U., Iqbal, Z., Malik, M. and Ahmad, M.I., 2018. Exploring the role of technological
developments and open innovation in the survival of SMEs: an empirical study of
Pakistan. International Journal of Business Forecasting and Marketing
Intelligence, 4(1), pp.64-85.
Hussain, A., Shahzad, A. and Hassan, R., 2020. Organizational and Environmental Factors with
the Mediating Role of E-Commerce and SME Performance. Journal of Open
Innovation: Technology, Market, and Complexity, 6(4), p.196.
Ikram, M., Sroufe, R., Mohsin, M., Solangi, Y.A., Shah, S.Z.A. and Shahzad, F., 2019. Does
CSR influence firm performance? A longitudinal study of SME sectors of
Pakistan. Journal of Global Responsibility.
Khan, N.R., Raziq, A. and Ghouri, A.M., 2019. Strategic human resource management and
organizational competitiveness in SMEs of Pakistan: Moderation role of regulatory
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