THIS LECTURE DEFINES THE ROLE OF NGOS AND SMEDA:Mission Statement

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SME Management (MGT-601)

Lesson 8

THIS LECTURE DEFINES THE ROLE OF NGOS AND SMEDA

The Role of NGOs

The NGOs are working on socio-economic sector in the development of SMEs. They are privately owned

organization registered under the social welfare act. They normally work through grants, aids or donation

based finances. They are having a very constructive role in the SME development. The special property of

this sector is gender development. They at some places tried to replicate Grameen banks model.

NGO Non-governmental Organization, a non-for-profit agency not affiliated with any government or

private sector entity, devoted to managing resources and implementing projects with the goal of addressing

social problems. May receive some public funding.

NGO is a community based organization with it's own management structure. The organisation may receive

some or all of its operating funds through a government department known as the funder, however it is

accountable or answerable to its stakeholders - the people who stand to benefit or lose by its actions. The

funder is one of those stakeholders.

NGOs play a vital role in development of SME. NGOs helps to reduce poverty , NGos creats awareness

in women of rural areas to develop small business in the their own premises .

The NGO Business

Non-governmental Organizations (NGOs) have become involved in international trade in

recent years in two different ways. The first is to establish fair trade cooperatives to

facilitate the export of goods from developing to industrialized countries directly from the

producers. Their underlying operating principle is to ensure that more of the profits from

the sales of diverse products go to the producer and less to middlemen. Often these

products are slightly more expensive than similar goods in the market and these

businesses rely on the social conscience of its customers to ensure a steady market for

their products.

Another less well known NGO business strategy is for the NGO itself to take on the role of

designer, marketer and distributor of specific products and to work with particularly

disadvantaged groups, primarily women, as sub-contractors who are taught to produce

the goods that the NGO sells. Thus the NGO, in effect becomes a private sector actor.

How they differ from standard private sector producers is in their selection of subcontractors

and the fact that all profits are invested back into the organization to ensure

organizational sustainability and to expand their base of sub-contractors. Their subcontracting

role also serves to empower their sub-contractors as opposed to setting up

an exploitative piece work arrangement. It provides a viable means of poor women to set

up their own home-based enterprises. The key to the success of this particular strategy

is the fact that the NGO takes on the responsibility for the development of the internation market for the

product produced.

SMEDA

Small and Medium enterprises Development Authority

Introduction

Premier institution of the Govt. of Pakistan under Ministry of Industries, Production & Special initiative,

SMEDA was established in October 1998 to take on the challenge of developing Small & Medium

Enterprises (SMEs) in Pakistan. With a futuristic approach and professional management structure it

has focus on providing an enabling environment and business development services to small and medium

enterprises. SMEDA is not only an SME policy-advisory body for the government of Pakistan but also

facilitates other stakeholders in addressing their SME development agendas.

Growth of globally competitive SME sector through a conducive and facilitating environment and support

services as an engine of growth and sustainability to national economy.

SME Management (MGT-601)

Mission Statement:

To function as the promoter & facilitator of SME sector in Pakistan by creating a conducive and facilitating

environment as well as providing and facilitating service delivery to SMEs for enhancing their capacities and

competitiveness.

SMEDA Objectives

1. Policy formulate to encourage the growth of SMEs in the country and to advise the Government

on fiscal and monetary issues related to SMEs.

2. Facilitation of Business Development Services to SMEs.

3. Facilitate the development and strengthening of SME representative bodies associations/chambers.

4. Set up and manage a service provider's database including machinery and supplier for SMEs.

5. Conducting sector studies and analysis for sector development strategies.

6. Facilitation of SMEs in securing financing.

7. Strengthening of SMEs by conducting and facilitating seminars, workshops and training programs.

8. Donor assistances for SME development of SMEs through programs and projects.

9. Assist SMEs in getting international certifications (such as UL, CE, DIN, JIS, ASME, KS, etc.) for

their products and processes.

Identification of service opportunities on the basis of supply/demand gap.

References

1-reseach cells SMEDA/LCCI

2-Small industries and the developing economy in India by R.V.RAO

3-The essence of small business by ADRIAN BUCKLEY

Book recommended

Small industries and the developing economy in India by R.V.RAO

Key terms

NGOs (Non Governmental organizations)

Autonomous (Self governing)

Debt equity ratio (The ratio of money participation by the borrower and lender)

Subsidize (Helping money given by government to the producers)

Portfolio (A group of different investments held by a private investor)

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