CORPORATE WINDOW: What’s holding Pakistan’s SMEs back?

Pakistan’s small and medium enterprises (SMEs) are the backbone of our economy. With over 5.2 million businesses spread across manufacturing, services, and trade, SMEs contribute nearly 40 per cent to the GDP and employ more than 80pc of the non-agricultural labour force. From the furniture makers of Gujrat to the tech startups of Karachi, these businesses reflect the diversity and potential of Pakistan’s economic landscape. Yet, despite their significant contribution, many SMEs are unable to reach their full potential. The journey from potential to performance remains difficult for many, primarily due to structural and systemic barriers. While there have been positive efforts by both public and private sectors to support SMEs, including initiatives from the State Bank of Pakistan (SBP) and the SME Development Authority (SMEDA), many small businesses continue to face considerable challenges.