Even the positive aspect of risk diversification that is fostered by markets for Asset Based Securities and Collateralized Debt Obligations should not be misinterpreted as, for instance, the existence of ‘first loss’ tranches that stay as responsibilities of the originator banks cannot be ignored.
In Pakistan, the SME sector contributes 30 percent towards the country’s GDP, employ more than 70 percent of the non-agricultural workforce, accounts for 35 percent of the value added in the manufacturing industry and generates 25 percent in the export earnings. The sector has huge potential in generating employment and alleviation of poverty in the country.