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SMEs and its Role in Economic and Socio-Economic Development of Pakistan

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  • Ammad Zafar
  • Sadaf Mustafa

Abstract

SME‘s contributes to over 55% of GDP and over 65% of total employment in high-income countries. SME‘s and informal enterprises, account for over 60% of GDP and over 70% of total employment in low-income countries, while they contribute over 95% of total employment and about 70% of GDP in middle-income countries. Small and medium-sized enterprises (SMEs) are non-auxiliary, autonomous firms which employ less than 250 number of workers in Pakistan or having paid-up capital up to Rs.25 million and sales up to Rs.250 million per annum. Moreover, SME segment is the foundation of Pakistan's economy as far as its commitment towards GDP, work era and fare improvement. Economy related access is a key driver in building up the SME division which thusly prompts economic growth of the country. SMEs constitute about 90% of the considerable number of ventures in Pakistan; utilize 80% of the non-rural work constrain; and their contribution in the yearly GDP is up to 40%, roughly it has proportion of 30% in Pakistan's all exports. SMEs are spread in all areas of Pakistan with a noteworthy fixation in Punjab (65.4%). The contribution of Balochistan in the nation's SME part happens to be the littlest (2.3%) while those of Sindh and KhyberPakhtunkhwa are 18% and 14.3%, separately. Despite of significant contribution of SMEs to the economic growth of Pakistan, more than 90% young people in the biggest city i.e. Karachi, believe they do not have enough economic opportunities for their professional growth. The studies reveal that, SMEs not only impacts GDP. It also helps to enhance the livelihood of people of the country by creating more economic opportunities. The study focuses on structural analysis of SMEs and its role on economic and socio-economic growth of Pakistan. It also discusses the socio-economic challenges faced by Pakistan.

Suggested Citation

  • Ammad Zafar & Sadaf Mustafa, 2017. "SMEs and its Role in Economic and Socio-Economic Development of Pakistan," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(4), pages 195-205, October.
    • Handle: RePEc:hur:ijaraf:v:7:y:2017:i:4:p:195-205
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    References listed on IDEAS

    as
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    3. Ammad Zafar & Khalid Iraqi & Sadaf Mustafa, 2017. "Analysis of Role of Educational Institutions in Development of Entrepreneurs (A Case Study of Karachi)," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(1), pages 95-110, January.
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    6. Anwar Ali Shah G Syed & Muhammad Muneer Ahmadani & Naveed Shaikh & Faiz Muhammad Shaikh, 2012. "Impact Analysis of SMEs Sector in Economic Development of Pakistan: A Case of Sindh," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 2(2), pages 44-53.
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    Cited by:

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    3. Nadia Akhtar & Syed Atif Bokhari & Michael Alan Martin & Zafeer Saqib & Muhammad Irfan Khan & Arif Mahmud & Muhammad Zaman-ul-Haq & Sarah Amir, 2022. "Uncovering Barriers for Industrial Symbiosis: Assessing Prospects for Eco-Industrialization through Small and Medium-Sized Enterprises in Developing Regions," Sustainability, MDPI, vol. 14(11), pages 1-21, June.
    4. Jiang Min & Shuja Iqbal & Muhammad Aamir Shafique Khan & Shamim Akhtar & Farooq Anwar & Sikandar Ali Qalati, 2020. "Impact of supervisory behavior on sustainable employee performance: Mediation of conflict management strategies using PLS-SEM," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-20, September.
    5. Sunday C. Eze & Vera C. A. Chinedu-Eze & Clinton K. Okike & Adenike O. Bello, 2020. "Critical factors influencing the adoption of digital marketing devices by service-oriented micro-businesses in Nigeria: A thematic analysis approach," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-14, December.
    6. Edward Kiringa & Fredrick W.S. Ndede & Argan Wekesa, 2021. "Relationship lending and access to financial services by SMEs in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(5), pages 235-244, July.
    7. Sunday C. Eze & Vera C. A. Chinedu-Eze & Clinton K. Okike & Adenike O. Bello, 2020. "Factors influencing the use of e-learning facilities by students in a private Higher Education Institution (HEI) in a developing economy," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-15, December.
    8. Erna Listyaningsih & Rahyono Rahyono & Apip Alansori & Amirul Mukminin, 2024. "Financial Literacy, Financial Inclusion, and Financial Statements on MSMEs’ Performance and Sustainability with Business Length as a Moderating Variable," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 108-127.
    9. Muhammad Waleed Khalid & Aqueel Imtiaz Wahga & Muhammad Gulzaib Chaudhary & Safyan Majid & Muhammad Awais, 2023. "Impact of Financial Literacy on Access to Finance and Firm Performance: An Analysis of Growing Industry Cluster in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 45-53.
    10. Ashraf Mishrif & Asharul Khan, 2023. "Technology adoption as survival strategy for small and medium enterprises during COVID-19," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-23, December.
    11. Faiza Manzoor & Longbao Wei & Mohammad Nurunnabi & Qazi Abdul Subhan, 2019. "Role of SME in Poverty Alleviation in SAARC Region via Panel Data Analysis," Sustainability, MDPI, vol. 11(22), pages 1-14, November.
    12. MD Nazmul Islam & Wilson Ozuem & Gordon Bowen & Michelle Willis & Raye Ng, 2021. "An Empirical Investigation and Conceptual Model of Perceptions, Support, and Barriers to Marketing in Social Enterprises in Bangladesh," Sustainability, MDPI, vol. 13(1), pages 1-20, January.
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    14. Syed Haider Ali Shah & Basheer M. Al-Ghazali & Sabeen Bhatti & Nida Aman & Mochammed Fahlevi & Mohammed Aljuaid & Fakhrul Hasan, 2023. "The Impact of Perceived CSR on Employees’ Pro-Environmental Behaviors: The Mediating Effects of Environmental Consciousness and Environmental Commitment," Sustainability, MDPI, vol. 15(5), pages 1-25, February.
    15. Sheema Matloob & Mónica Lorena Sánchez Limón & Halia Mayela Valladares Montemayor & Ali Raza & Julio Cesar Castanon Rodriguez, 2023. "Does Strategic Change Enhance the Relationship between Firms’ Resources and SMEs Performance in Pakistan?," Sustainability, MDPI, vol. 15(3), pages 1-20, January.
    16. Maria Bano & Dr. Muhammad Nawaz & Touseef Ahmad & Fatima Ejaz, 2023. "The Performance of Small and Medium Sized Enterprises (SMEs) in Punjab: A Moderating Role of Corporate Image," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(3), pages 650-666.
    17. Israr Ahmad & Dr. Shuhymee Ahmad*, 2018. "Multiple Skills and Medium Enterprises’ Performance in Punjab Pakistan: A Pilot Study," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 44-49:4.

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