The Role of Small and Medium Enterprises in Perspective of Labour Abundant Economy of Pakistan

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Imdad Ali Khowaja
Sikandar Hussain Soomro
Muhammad Nawaz

Abstract

The small and medium enterprise sector has played a significant role in the
income and employment generation in the developed and developing
economies. The current study is conducted to find out the potential of the
SMEs to achieve the economic and social objectives. The survey data of 300
SMEs indicates the wider gap between the demands for SME financing and the
supply-side. The test result p<0.05 indicates that the lack of access to capital
investment, finance, and support from the public sector institutions to upgrade
the technology and commutation means are the major obstacles for the SME's
to scale-up their performance in the current market reforms. While the result
of the regression model (r=0.992) indicates a strong correlation between the
variables. In fact, those SME's had overcome the issues of technology,
communication, dearth of functional barriers because they had the access to
the formal sources of financing. Therefore, to attain the target of 10 million
jobs and reduce unemployment in the country, the policymakers have to make
necessary arrangements to establish new financial sources and facilitate the
existing financial firms to expand their network for the advancement and
modernization of SMEs operating in the formal and informal fold of the
economy.

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Author Biographies

Imdad Ali Khowaja

Department of Economics, University of Sindh, Jamshoro, Sindh, Pakistan

Sikandar Hussain Soomro

Department of Economics, University of Sindh, Jamshoro, Sindh, Pakistan

Muhammad Nawaz

Department of Commerce, University of Sindh - Laar Campus, Badin, Sindh. Pakistan