Flip-flopping policies for SMEs

The financial results for the third quarter have started pouring in, and for banks, it’s a bonanza with triple-digit bottom-line growth. However, what the numbers really represent is a broken economy where the sovereign can’t keep its house in order and financial institutions fail to do their job. And the biggest casualty of this collective incompetence is perhaps borne by the small and medium enterprises of the country. We have heard this story countless times before: of how small and medium enterprises (SMEs) in Pakistan, despite making up 90 per cent of all businesses and employing 30pc of the labour force, are not realising their potential. The reason is simple: they lack access to credit because, you know, banks here don’t do any funny business. Unless, of course, you are a certain oil marketing company. As of June end, the total outstanding SME financing through financial institutions stood at Rs457.1 billion. This is 5.7pc down compared to the same period last year and 4.6pc over the preceding quarter. Meanwhile, the number of borrowers reached 154,229 — the lowest since June 2015 levels.