Pakistani SMEs struggle to make their mark in exports: Insights from Rana Muhammad Nisar

By The Tribune International Correspondent 

LAHORE: Small and Medium Enterprises (SMEs) are considered the backbone of economies around the world, playing a key role in job creation, industrial growth, and export development.

Yet in Pakistan, the role of SMEs in exports remains weak compared to global standards. Speaking to this correspondent, Rana Muhammad Nisar, owner of M/s Ghufraan Enterprises, Lahore Chamber of Commerce and Industry (LCCI) executive member, shed light on the many reasons behind this sluggish performance and explained what needs to be done to put Pakistani SMEs on the global trade map.

Read also: LCCI to govt: Step in now or risk export meltdown

According to Nisar, one of the biggest hurdles is the lack of modern technology.

He pointed out that most small and medium-sized businesses in Pakistan continue to rely on outdated machinery and traditional methods of production.

This results in products that fail to meet the quality and precision demanded by international buyers. “If the technology is old, the output will never match international benchmarks,” he remarked, highlighting that without investing in advanced equipment, SMEs cannot hope to compete globally.

Another major weakness lies in the absence of proper market research and information. Nisar explained that the majority of SMEs have little or no understanding of foreign markets, their demands, trends, and consumer preferences. “You cannot sell in a market if you don’t know what the customer wants,” he stressed. This information gap prevents SMEs from tailoring their products to meet the exact needs of international buyers.

Branding and marketing, according to him, is another missing link. Many Pakistani SMEs produce goods of acceptable quality but fail to introduce them effectively on the international stage. Without strong branding, attractive packaging, and consistent marketing, these businesses fail to inspire buyer confidence. “You may have a good product, but if people don’t know your brand, they won’t trust it,” Nisar observed.

Financing is also a persistent roadblock. Nisar noted that banks and financial institutions place complicated conditions on SMEs, making it extremely difficult for them to secure funds for export operations. Without easy access to finance, these businesses cannot expand, upgrade their facilities, or fulfill large export orders.

In today’s world, digital platforms and e-commerce are reshaping trade, with a large share of global exports taking place online. Yet Pakistani SMEs lag far behind in this arena. Nisar believes that the failure to take advantage of digital platforms is costing the country billions in missed opportunities. “While the world is selling online, our SMEs are still waiting for physical exhibitions and traditional buyers,” he said, calling for a major shift in mindset.

Policy issues add to the challenges. Complicated tax systems, delayed refunds, lack of export subsidies, and bureaucratic hurdles often discourage small businesses from entering the export sector. Nisar highlighted that the slow response of government institutions further damages the confidence of SMEs.

Rising production costs also eat away at competitiveness. Energy shortages, high raw material prices, and expensive transportation mean that Pakistani products often fail to match the prices offered by competitors in the global market. “Even if the quality is good, high costs make our products less attractive,” Nisar explained.

Despite these hurdles, Nisar expressed optimism that with the right reforms, Pakistani SMEs could play a much larger role in boosting exports. He urged the government to provide targeted support in technology upgradation, easy financing schemes, and SME-focused export policies. He also emphasized training programs in branding, marketing, and e-commerce to help small businesses enter the digital trade space.

“SMEs are the backbone of our economy, but their potential remains untapped. If given proper tools and support, they can change the face of Pakistan’s exports,” Nisar concluded.