PROJEC T PR OGRESS

REPORT
Submitted By
•Anjia Akber Ali
•Emaan Malik
•Zaryab Bin Razi
•Moiz

•Mahnoor

•Saad
CPP FORM
 CURRENT SCOPE OF THE PROJECT
- Understanding the current position of the International and local market
- Focus on the challenges faced by SMEs (Internationally and locally) and identifying
gaps in the market along with the resolutions
- Highlighting the growth strategies and the business models followed by SMEs in
different countries
- Understanding the trend Analysis and mapping their success/failure factors
ARTICLES FOR RESEARCH
1. Survey Report: Impact of COVID-19 on SMEs
https://smeda.org/phocadownload/Research_Publications/SMEDA%20Survey%20Report%20
-%20COVID-19%20Impact%20on%20SMEs%20reduce.pdf
SMEs want facilitation
from government to cope up with the issues Post
Lockdown.
- Special grants and interest free loans to be
provided to SMEs
-SME facilitation help desks at banks in obtaining
loans.
-Financial assistance to online businesses
-Government to give loans to retail stores so that
they do not lay off employees
-Soft loans for warehousing, transportation
-National SME portal
2. OPPORTUNITIES FOR SMEs UNDER CHINA PAKISTAN ECONOMIC CORRIDOR (CPEC)
https://smeda.org/phocadownload/Publicatoins/Opportunities%20for%20SMEs%20under%20China%20Pakistan%20Economic%20Corridor%20-%20
CPEC.pdf
- Importance of SMEs for leveraging economic growth
In Pakistan, around 99% establishments are SMEs which contribute to 40% to GDP and 40% exports. Pakistan SMEs are largest contributor to
employment generation, and they boost economic growth in terms of technology and skills. The influx of Chinese investments, business and workforce
across the border holds opportunities for Pakistan. The report talks about improvement and enhancement of exports to china under CPEC and
facilitation of SMEs operating in Pakistan and China.
Challenges identified
- -Technical and skill related capabilities
- -Transportation
- -Communication
- -Energy and education
- -Funds for infrastructure development was inadequate
Recommendations
-Provide loan/credit facility
-Decrease price of elasticity for manufacturers
-Skill and capacity building
-International Linkage development
-Conflict resolution with Chinese
 3 . I M PA C T O F C O V I D - 1 9 O N
S M E S S U RV E Y R E P O R T
SMEDA – ADBI – APO JOINT
S U RV E Y ( PA K I S TA N A N D
REGIONAL COUNTRIES)
HTTPS://SMEDA.ORG/PHOCA
DOWNLOAD/RESEARCH_PUB
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D B I % 2 0 R E P O RT % 2 0 O N % 2 0 I M
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Issues
ON%20SMES.PDF
4 . S M A L L A N D M E D I U M - S I Z E E N T E R P R I S E S I N PA K I S TA N : D E F I N I T I O N A N D C R I T I C A L I S S U E S
H T T P S : / / J O U R N A L S . I O B M R E S E A R C H . C O M / I N D E X . P H P / P B R / A RT I C L E / V I E W / 1 2 4 5 / 2 2 9
Issues
There is no standard definition of SMEs and how it can be a drawback in the progression of
economy.This paper also highlights the critical issues of Pakistani SMEs such as financial, human,
physical and technological.
Recommendations
The established definition should be applicable and of appropriate size and attributes. It should be
established on standard criteria after analyzing market failures and practical constraints. The definition
should be based on the needs and goals of the policy established.
Other Issues
-Government, banks and financial institutes emphasized more on the large sector than on SMEs
-Lack of tangible resources such as physical and financial capitals
- No access to formal sources of financing (including banks and lending institutions).
- shortage of skilled workers, lack of business opportunities, corruption, lack of knowledge,
government interference, procurement of quality raw material, registration and license for work,
adaptation and knowledge
- Scarcity of capital goods, lack of resources and data. Resistance to change and unskilled
workers/labors are one of the other causes of SME's failures. Lack of knowledge and technology
has made the working difficult
- Recommendations to Eradicate barriers
Balance Scorecard that helps to eliminate the critical problems and barriers.
1. Internal Process
2. Financial Perspective
3. Innovation and learning
4. Customer Perspective
5. Management Training
6. Upgrading of technology
7. Exports/trade
8. Research and Development
9. Lack of SME data base
10. Infrastructure
5. W H AT A R E T H E B I G G E S T O B S T A C L E S T O G R O W T H O F S M E S I N
D E V E L O P I N G C O U N T R I E S ? E A N E M P I R I C A L E V I D E N C E F R O M A N E N T E R P R I S E S U RV E Y

H T T P S : / / W W W. S C I E N C E D I R E C T. C O M / S C I E N C E / A R T I C L E / P I I / S 2 2 1 4 8 4 5 0 1 6 3 0 0 5 3 9

It talks about the importance of SMEs both in developed and developing economies.
SMEs are more likely to perceive access to financeas the most significant obstacle to their growth comparedwith big
firms
Issues
-Access to Finance
-Tax rate
-Competition
Electricity
Political factors
High growth Firms
Have state ownership

Among those five obstacles,“access to finance”ap-pears to be the biggest barrier, followed by“competition”.
Case 6: An Exploratory Evidence of the Types of Challenges and Opportunities Perceived by the
Small and Medium Enterprises (SMEs) in the Apparel Export Sector of Pakistan

Mahwish J. Khan
Abasyn Journal of Social Sciences – Vol (10), Issue (2), 2017.

Summary:

This qualitative study is conducted to explore the challenges and opportunities for the apparel exporting SMEs in
Pakistan. After literature review, 6 SMEs – 2 from each apparel clusters of Lahore, Faisalabad and Karachi – were
selected using purposive sampling. In-depth semi-structured interviews were conducted with senior managers at these
firms. Findings suggest that the burden of terrorism on the SME is far greater than that of the energy crisis. The energy
crisis and compliances drive up the costs of production and reduce international competitiveness of the suppliers.
However, terrorism creates an unlevel playing field that has a much larger impact on the overall apparel sector.

Challenges Identified:

Law and order situation, Impact On Supply Chain, Energy Crisis

Case 7: Financial Challenges That Impede Increasing the Productivity of SMEs in Arab Region

Journal of Contemporary Management.

Submitted on 12/July/2012 Article ID: 1929-0128-2012-02-17-16 Dahi Emine

Summary:

Lack of finance, lack of clear strategies, lack of skilled HR, and low technological capabilities are proved by
surveyed CEOs as main challenges for their SMEs developments. Finally, the government has been the most
important supporting financial agency for SMEs in the region economies. However, evidence of the
effectiveness of government and banking programs to support SME development is mixed and not so
encouraging.

Challenges Identified:

Cash Flow, Internal Workforce, Lack Of Financing (from banks)

Case 8: Exporting challenges of SMEs: A review and future research agenda

Journal of World Business

Volume 52, Issue 3, April 2017, Pages 327-342

Summary:

The lack of knowledge of foreign markets, lack of workers with enough information or experience
about foreign markets, and the misconception that the size of the demand in the foreign markets is
too high for the SMEs to handle.

Challenges Identified:

Lack Of Market Research, Internal Workforce, Impact On Supply Chain

Case 9: MASTERS OF DISASTERS? CHALLENGES AND OPPORTUNITIES FOR
SMES IN TIMES OF CRISIS

Journal of Business Research

Volume 116, August 2020, Pages 199-208

Summary:

Small and medium-sized enterprises (SMEs) are the backbone of every economy. So, when an external
crisis jeopardizes markets, such as the recent COVID-19 outbreak, SMEs are hit with great force. Their
so-called liability of smallness, a lack of resources that would shield them from outside shocks, worsens
the situation.

Challenges Identified:

Impact On Supply Chain, External Crisis, Cash Flow

Case 10: Challenges for Pakistani SMEs in a Knowledge-Based Economy

Journal of Business Research

Volume 116, August 2020, Pages 199-208

Summary:

Small and medium-sized enterprises (SMEs) are the backbone of every economy. So, when an external
crisis jeopardizes markets, such as the recent COVID-19 outbreak, SMEs are hit with great force. Their
so-called liability of smallness, a lack of resources that would shield them from outside shocks, worsens
the situation.

Challenges Identified:

Lack Of Market Research, Internal Workforce, Impact On Supply Chain

Case 11
Challenges Faced By SME’s In South Africa: Are Marketing Skills Needed?
Michael Cant
International Business & Economics Research Journal – October 2012Volume 11, Number 10
• The research aims to explore the reasons for the failure of SMEs in South Africa and the challenges
these businesses face. The research problem of this study takes birth from the prevailing high rates of
business failures and the lack of marketing skills of Native SME managers. The research explores the
correlation between business success and the need for marketing skills. The research made a direct
link to the lack of marketing skills and the failure of businesses. The conclusion is that there is a
positive correlation between the success of a business and the need for marketing skills in South
African SME’s. The challenge that now faces government, educational institutions and businesses
themselves is to develop these marketing skills in such a way that the chances of survival of these
SME’s are increased.

Challenges identified:
Lack of marketing skills , financial issues
Case 12
• CHALLENGES FACED BY THE SMALL AND MEDIUM ENTERPRISES (SMEs) IN MALAYSIA: AN INTELLECTUAL CAPITAL
PERSPECTIVE
Muhammad Khalique, Abu Hassan Md. Isa, Jamal Abdul Nassir Shaari and Adel Ageel
International Journal of Current Research Vol. 3, Issue, 6, pp.398-401, June, 2011

• The main thrust of this study was on the competiveness of the SMEs in a knowledge-based economy. This study essentially explores the
challenges which are facing the small and medium enterprises (SMEs) in Malaysia. The significance of the study will add the knowledge about
the current issues relating with SMEs in Malaysia in intellectual capital perspective. The research suggests that in a knowledge-based economy,
the intellectual capital appear as most critical factor for the success of the organizations.

Challenges identified:
• Entering into a knowledge based economy , globalization , liberalization,growing information and technology
• Recession, barrier from global sourcing, low productivity, lack of managerial capabilities, and lack of financing, difficulty in accessing
management, technology and heavy regulatory burden.,lack of access to credit, lack of access to formal business and social networks.Llack of
knowledge regarding marketing techniques, branding, customer loyalty and also lack of good contacts with others local and international
enterprises. e social barriers
• Case 13
Convergence of Conceptual Innovation Model to Reduce Challenges Faced by the Small and Medium
SizedEnterprises’ (SMEs) in Bangladesh
• TarnimaWardaAndaliband Hasliza Abdul Halim
• J. Open Innov. Technol. Mark. Complex. 2019, 5, 63
• This paper attempts to analyze the issues and challenges being faced by the small and medium enterprises in
Bangladesh, also deals with the entrepreneurs of Bangladesh to take their opinions regarding resolutions and
puts effort to create an innovation model to reduce these challenges and constraints of the manufacturing
SMEs of Bangladesh. The findings of this study will help SME entrepreneurs and policy-makers be prepared
for challenges by understanding their strengths and weaknesses, and they will also assist entrepreneurs in
converging on the constructed conceptual innovation model as per the concept of Sitwala in 2014 to reduce
the challenges in their SMEs. Innovation model can resolve the core challenges faced by the SMEs if
implemented by the entrepreneurs in their particular SMEs. Moreover, the notion of considering employees’
rights have also come up in this innovation model as a resolving technique that will in general safeguard
positions and jobs of many employees at the SMEs and will also provide the owners and leaders of the SMEs
to think in a more humanitarian manner to deal with these challenges by keeping the SME family together
under one umbrella.
Case 14
FINANCE AND TECHNOLOGY: KEY CHALLENGES FACED BY SMALL AND MEDIUM ENTERPRISES (SMES) IN OMAN
• Mr. Abdullah Al Buraiki, Dr. M. Firdouse Rahman Khan
• International Journal of Management, Innovation & Entrepreneurial Research EISSN: 2395-7662, Vol. 4, No 2, 2018, pp 01-12
• The objectives of the study were to critically investigate the challenges faced by SMEs; to analyze SMEs difficulties during adopting new technologies and to
critically investigate the difficulties in the form of policies and procedures.For this research study, purposive sampling methodology was adopted.The study
reveals that most of the respondents got delay in the commencement of business due to lack of finance. It is also revealed that the SMEs are in dire need of
technical support at the time of commencement of their businesses and need support to establish IT infrastructure.The study suggests that the Governmental
authority should monitor and follow up SMEs to avoid the SME units becoming sick and provide technical support, guidance and nurse the units, if they
become sick. Also, the licensing for the SME units should be made easier through single window system.

• Challeneges identified:
• The Government of Oman has shown great concern in the growth of SMEsduring the past few years. However, the SMEs in Oman do not possess enough
resources to manage the increasingdemand of the customers although they have the skills and manpower. The lack of financial sufficiency limiting the
production of these enterprises thereby the expansion of their businesses. This leads to thefollowing research questions viz.
• Most of the respondents chose „Initial Capital Finance‟ as the prime factor necessary to start a business or for the survival of the business. „Workforce‟ was
considered as second and a „Good Location‟ was considered third and it was interesting to see that Training was not given much importance and it was also
noted that nobody was interested to start a business obtaining loan.
• Most of the SMEs reported that they need technical support at the time of commencement of their businesses and needed
support to establish IT infrastructure. They agreed that the IT support will increase the number of satisfied customers and
thereby their future income as well. However, there are specialized companies, which provide technical support to establishing
SMEs but the maintenance will be a costlier affair (including technical staff salaries, up gradation etc.) and also they needed
technocrats to resolve the technical issues arising.
• Most of the SMEs agreedthatthe Government encourages entrepreneurs to establish SME units in Oman but they are not
satisfied with ease of procedures for establishing such unit as they needed lots of time to start functioning the unit. It is highly
preferred that the facility to get all licenses in one place will convene them to establish their units quickly. They reported that
they need to visit different offices situated at different locations to obtain licenses as they were not interlinked. They reported
that they did not spend more time to obtain a labor clearance from the concerned authorities and the labor clearance procedures
were simple and logical but they reported that the sufficient number of workers were not sanctioned by the labor clearance
authorities.They agreedthat the Omanization affected their units as they were dependent on expatriates.
• Most of them reported that there are special agencies formed by the Government to support the SMEs towards speeding up the
establishment of SME units and to guide them solve their issues, good on paper are seldom executed in reality. They expect the
financial intermediation by the General Authority for SMEs. It was reported that an entrepreneur had to struggle and come up
with his own strategy to become a successful entrepreneur and thus they insisted the need for a supporting mechanism to
market SMEs‟ products and support to eliminate the shortage of skilled and labor force.
Case 15
Challenges for Pakistani SMEs in a Knowledge-Based Economy
• Muhammad Khalique, Abu Hassan Md. Isa and Jamal Abdul Nassir Shaari
• Indus Journal of Management & Social Sciences, 5(2):74 ‐80 (Fall 2011)
• Research is made for an attempt to indentify the major issues of knowledge-based economy, which are facing SMEs in Pakistan. Literature
review reveals that Small and Medium Enterprises (SMEs) are playing very important role in the development of economy in Pakistan. Despite
of the important contribution to economy, SMEs are still facing serious issues. These issues create serious threats for the survival of SMEs in
Pakistan. After twenty first century, the economy transformed from production based to a knowledge-based economy. In a knowledge-based
economy intellectual capital appeared as a critical factor for the successes of organizations.It is concluded that at the beginning of the twenty first
century the concept of intellectual capital has gained a significant attention in a knowledge-based economy. There is no doubt, present economy
is a knowledge-based economy and it stand on intellectual capital. Therefore, it is indispensible for SMEs in Pakistan to revolutionize and adopt
the concept and applications of intellectual capital in order to dilute the emerging economics challenges. Hence, SMEs in Pakistan need to
strengthen the concept and applications of intellectual capital in their organizations in order to achieve the competitive edge in the market

• Challenges identified:
• Political instability, lack of intellectual capital and infrastructure, and energy crises are the general and serious threats, which are facing SMEs
adversely
• SMEs in Pakistan have serious shortage to implement the concept of performance management system (PMS). Due to lack of implementation of
PMS the SMEs are less competitive and efficient. In addition, they identified that SMEs do not apply human resources policy in recruitment,
generally purse tradition methods for selection. Akthar et al. (2011) identified that SMEs in Pakistan have major challenges such as difficult entry
and fear of entering and performing well in foreign markets
• Major challenges for the success of enterprises are the lack of entrepreneurial skills, education and characteristics. In addition, they argued that in
Pakistan there is a lack of concept of proper training and basic education before starting the business. The deficit of training and education is the
main cause to be the failure of these enterprises.
TABULAR FORM ARTICLES
NEXT MILESTONES TO
ACHIEVE
-Understand the business models to eradicated the barriers and the issues still persisiting
-Developing a model/ road map for SMEs to grow into MNCs
REFERENCES
1. https://smeda.org/phocadownload/Research_Publications/SMEDA%20Survey%20Report%
20-%20COVID-19%20Impact%20on%20SMEs%20reduce.pdf
2.https://smeda.org/phocadownload/Publicatoins/Opportunities%20for%20SMEs%20under
%20China%20Pakistan%20Economic%20Corridor%20-%20CPEC.pdf
3.
https://smeda.org/phocadownload/Research_Publications/SMEDA%20-%20ADBI%20Report
%20on%20Impact%20of%20COVID-19%20on%20SMEs.pdf
4. https://journals.iobmresearch.com/index.php/PBR/article/view/1245/229
5. https://www.sciencedirect.com/science/article/pii/S2214845016300539