SMEs, which contribute almost 25% percent of the country’s exports, are an important business segment that has been devastated by the recent floods.
The 2022 floods have greatly affected life in Pakistan, around 118 of the country’s 160 districts have been destroyed by floods and heavy rains. Comparing these numbers to the 2010 floods, it could easily be determined that the recent floods are worse than anything the country has experienced.
Most areas, including lower Sindh and Baluchistan, are still covered by floods and with heavy rains expected to continue into September, these places are unlikely to be free of flooding any time soon. Amidst all these havoc, companies, especially small and medium-sized companies that worked in these areas, have been closed, although there are no precise facts and figures, but it could be easily predicted that many of these SMEs will not be able to revive after the end of the floods. .
With SMEs contributing 25% of Pakistan’s exports, surely this is an important market segment that should be revived immediately. Considering the seriousness of the situation, the Small and Medium Enterprises Development Authority (SMEDA) must immediately collaborate with disaster management authorities and local and central banks to restore the damage that has been done.
The things that would ensure the revival of Pakistan’s SME sector are prioritization and flash loan schemes that provide all affected small and medium enterprises to get easy loans and restart their businesses. Doing this will not only improve the economy of the local area, but also help the country in the midst of an economic downturn.
According to a survey, Pakistan has more than 5 million SMEs working in different sectors like manufacturing, trade, service and IT etc. Combined, these SMEs contribute 40% of Pakistan’s GDP.
Present in such large numbers, these SMEs may be revived once again by 2023-24 if the authorities act quickly and work together with the government to get these businesses back on their feet.
With more rain expected, power outages, inventory damage and a declining workforce, hopes for many SMEs are quite low, but how and when will they be able to get back to where they were before the floods? That is a question that only time can answer.
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