Figure 17.1: Number of Workers in SME’s Removing Impediments to Growth *Annual Growth Rate Source: LFS, PBS SMEs have also been at the cutting edge of Pakistan’s exports, with exports like sports goods, surgical instruments, leather products, etc. The following recommendations are made for promoting the growth of SMEs in Pakistan: i) SMEs have a share in private sector credit of only 6 percent, despite their contribu­tion of over 35 percent to non-agricultural employment in the country. As highlighted earlier in the book, there should be a minimum target for lending to socially preferred sectors in Pakistan of 20 percent, which if not attained by banks will lead to a higher corporate income tax rate. If the share exceeds 20 percent, then a tax credit can be made available. Also, there should be a tax credit provision for bad debt. ii) The SMEDA and SME bank have been passive institutions up till now. The time has come to activate them and promote their role better in technology extension services, vocational training and preparation of feasibility reports for small projects in different sectors, along with arrangements for funding of eligible investors. 179