In a significant policy shift aimed at empowering Pakistan’s small business ecosystem, the federal government has expanded the definition of micro-enterprises to include companies with annual revenues of up to Rs30 million.
The decision came during a high-level meeting of the Small and Medium Enterprise Development Authority (SMEDA), chaired by Prime Minister Shehbaz Sharif on Tuesday. This reclassification is part of a broader government push to bring more businesses under SMEDA’s support umbrella, in line with the prime minister’s directive to accelerate SME sector growth.
A Bigger Tent for Micro-Enterprises
Previously, many firms on the lower end of the small-business spectrum operated without formal recognition or access to tailored government support. With this new threshold, a much larger number of businesses will now qualify for the benefits and programs offered by SMEDA.
According to officials present at the meeting, the move is expected to unlock support for a wide range of enterprises that have been flying under the radar — from local manufacturers to tech startups generating modest but consistent revenues.
Focus on Women and Digital Inclusion
The meeting also highlighted ongoing reforms at SMEDA, with a strong emphasis on empowering women entrepreneurs. A Women Entrepreneurship Policy is currently in the works and is expected to be presented to the federal cabinet soon. Alongside this, a dedicated digital platform for women-led businesses is also on the horizon, designed to offer resources, mentorship, and networking opportunities.
This dual approach — policy and technology — signals a shift toward more inclusive economic planning, especially in a country where female participation in formal enterprise remains low.
What’s Next: Data, Credit, and Legal Frameworks
Beyond redefinitions and inclusivity, SMEDA is also working on structural reforms to strengthen the SME sector’s foundations.
Key initiatives include:
- A new credit scoring system aimed at easing access to finance for smaller firms.
- Export-oriented strategies to help SMEs tap into international markets.
- Legal frameworks for subcontracting, designed to formalize partnerships between SMEs and larger industries.
Much of this technical work has been outsourced to private sector experts to ensure efficiency and global best practices. SMEDA is also collaborating with the Federal Bureau of Statistics on a comprehensive survey covering 20 key economic sectors, likely to inform future policy decisions.
National-Level Coordination
The meeting brought together a broad range of stakeholders — from federal ministers to provincial chief secretaries and representatives from Gilgit-Baltistan and Azad Jammu & Kashmir — underscoring the government’s intent to harmonize SME development efforts across the country.
Prime Minister Sharif reaffirmed his commitment to the sector, calling small and medium-sized businesses the “backbone of national economic progress.”
