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ICCI signs MoU with PSX to increase access to equity funds for SMEs

ICCI signs MoU with PSX to increase access to equity funds for SMEs

ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) has signed a Memorandum of Understanding with Pakistan Stock Exchange (PSX) to facilitate SMEs in generating funds from capital market for business growth and expansion. Khalid Iqbal Malik, President, ICCI and Nadeem Naqvi, Managing Director, PSX signed the MoU at a ceremony held at Chamber House. Asghar Abbas Naqvi Regional Head Islamabad and Muhammad Abduull, Head of Special Reports, PSX were also present at the occasion.

By signing MoU, both organizations agreed to work jointly for strengthening SME sector and explore ways & means to initiate common business support programs/projects for SMEs.

Speaking at the occasion, Nadeem Naqvi, Managing Director, Pakistan Stock Exchange said that to increase access to equity finance for SMEs, a growing number of developing countries were creating specialized equity markets, differentiated from the main exchange. He said PSX has also developed such specialized segment for listing and trading of shares of SMEs and named it as “SME Board”. He said the SME Board was a good platform for SMEs to raise capital to fund their growth and expansion needs. He said it was an interest free and Sharia compliant facility for SMEs and stressed upon the SMEs to get listed on SME Board to get funds from capital market. He assured that PSX would help SMEs in documentation matters to facilitate their listing on stock exchange. He said PSX provided 20% annual return on investment in capital market and added that business entities should take full benefit of these high returns for growth of business activities.

In his welcome address, Khalid Iqbal Malik, President, Islamabad Chamber of Commerce said that SME sector was facing many challenges and called upon the government to give 5-year tax deferral to SMEs in new budget for their revival and growth. He said that SMEs were the backbone of the economy as they constituted nearly 90 percent of all the enterprises in Pakistan, employed 80 percent of the non-agricultural labor force and contributed approximately 40 percent to the annual GDP of the country. However, he said due to strict lending criteria of banks for SMEs and tough provisions of collateral, small businesses were facing many problems in promoting business activities.

He said due to difficult lending criteria, banking credit to SMEs has come down 7 percent which should be a cause of concern for the policymakers. He appreciated the initiative of PSX for setting up SME Board to provide easy funding facility to SMEs and hoped that it would lead to better growth of these business entities in the country.

Khalid Malik, Senior Vice President ICCI, Zubair Ahmed Malik, Mian Akram Farid, Mian Shaukat Masud, Zafar Bakhtawari and others were also present at the occasion.