He stated that the loan offered by the Asian Development Bank (ADB) of $12 million is being utilised fully for further strengthening this sector.
Consultations have begun with the chambers and industrial associations, he said, to pave the way for the country's first ever SME policy.
The ADB fund is being consumed to develop a long term SME policy coupled with the Common Facility Centres in various parts of the country. But, he added, the job cannot be done without the active participation of the private sector stakeholders.
Khwaja also apprised the meeting of SMEDA's organisation of 150 training programmes for SMEs in 42 cities throughout the country.
Earlier, in his address of welcome, RCCI Senior Vice-President Jawed Akhtar Bhatti lauded the role of SMEDA, but said one way to increase the number and areas of the training programmes was to reduce their fees.
Bhatti reminded his audience that the world was changing rapidly. After the WTO regime kicks in next year, he stressed, only countries with a strong economic structure will survive and dominate.
SMEs, he argued, are the principal driving force of economic development and the backbone of the economy of a country. They help stimulate industrial skills and diversify economic activity.
One does not wish to put a damper on either gentleman's well meaning faith in SMEs as the panacea for all our economic ills.
There can be no denying that SMEs provide more employment for every dollar invested than large scale enterprises, which tend to be automated and capital intensive.
The relatively undeveloped state of our technological prowess and innovation means that large scale enterprises almost invariably have to be set up with imported technology.
In this regard, the developing world is awash with outmoded technology, plant and machinery, which the developed countries sell off at a profit on its residual value to the developing world when their own dizzying rate of scientific and technological advance renders such machinery obsolete.
The developed world has achieved this level of scientific and technological excellence through the long period of the development of capitalism since the Renaissance in Europe, aided by colonial loot and plunder.
In the developed world, it is no longer SMEs that are the "principal driving forces" or the "backbone" of the economy. Multinational corporations have long ago assumed that mantle and spread their reach to the far corners of the globe.
Unfortunately, no such 'revolution' or 'renaissance' appears on the cards in the developing world, which lags behind in the wake of the advanced countries.
For these late industrialising economies, the historical conjuncture no longer affords the luxury of traversing the same path as the developed world did, let alone at the same pace (extending over more than five hundred years). A 'shortcut' and different paradigm is required.
It is in this context that developing economies such as Pakistan's find that SMEs provide distinct advantages in the shape of more jobs for every dollar invested, encouragement of technological innovation and creativity, and the diversification of the economy into non-traditional areas.
These are by no means inconsequential benefits for a developing economy. However, a note of caution may be in order that one must not get carried away by rhetoric either.
It is necessary to understand that while SMEs can certainly dent poverty and unemployment and even boost as a by-product the fight against illiteracy together with skill enhancement through training and education, by themselves they may not be able to eliminate these signs of underdevelopment.
For that, a more comprehensive programme of large scale industrialisation may still be required.
This venture can certainly be fed though, by the potential explosion of entrepreneur-ship and creativity that awaits the formulation and implementation of a long overdue SME policy.