UNISAME ADVOCATES FOR PAYE SCHEME FOR RESOLVING FINANCIAL WOES OF SECTOR

The Union of Small and Medium Enterprises (UNISAME) advocates for “pay-as-you-earn” (PAYE) leasing schemes as a primary solution to SME woes in Pakistan. PAYE is a financing method where businesses lease land, machinery, or buildings, and pay for them in installments using the income (earnings) generated by those assets.This approach eliminates the need for massive upfront cash or traditional bank collateral. Instead, the asset itself secures the loan. Here is why UNISAME and its president, Zulfikar Thaver, emphasize PAYE and broader reforms:Asset-Based Islamic Financing: PAYE allows businesses to lease commercial property, warehouses, and machinery on a rent-to-own basis. Since only 6–7% of private-sector credit reaches SMEs, this circumvents traditional bank reluctance by bypassing standard collateral requirements.Reduced Initial Burden: SMEs struggle with high power costs and input expenses. PAYE ensures small businesses can expand and modernize without depleting their working capital on large, outright purchases.Need for Broader Reforms: While PAYE addresses equipment and property leasing, UNISAME notes that the sector also desperately requires affordable energy, tax reliefs, and global marketing support. Without these, high overall costs of doing business remain a major roadblock.

Unisame chief Zulfikar Thaver has sent an email with a comprehensive proposal to PM Shebaz Sharif for consideration of setting up an institution to implement the scheme and launch it for high impact uplift of the sector.