Favourable ecosystem needed to spur SMEs
Bangladesh needs a favourable ecosystem to give a much-needed boost to the cottage, micro, small and medium enterprise (CMSME) sector with a view to creating adequate jobs and propelling the growth of the country, speakers said yesterday.
"The ecosystem for CMSMEs is yet to be created in Bangladesh, so entrepreneurs face numerous problems," said Ali Sabet, team leader of the PRISM Technical assistance to the Bangladesh Small and Cottage Industries Corporation.
"CMSMEs need practical coaching and mentoring, which are missing here. This is the real issue."
Women and youth entrepreneurs have been impacted by the pandemic, so they should get special priority, said Farah Kabir, country director of ActionAid Bangladesh.
Their comments came at a webinar titled "Post Covid Cottage, Micro, Small, and Medium Enterprises (CMSMEs): Youth and Women Responsive Strategy", jointly organised by The Daily Star and ActionAid Bangladesh.
The speakers recommended providing adequate finance, creating a favourable banking environment, easing documentation to start a business, policy support, and delivering state benefits to the grassroot CMSMEs in order to create the ecosystem.
About the banking environment, Sabet said CMSMEs were not the targeted customers of lenders.
"So, an alternative way to provide loans to CMSMEs is needed where a state financing authority can work well."
The budget for the next fiscal year has proposed granting tax exemption to women entrepreneurs on their annual turnover of up to Tk 70 lakh.
"It should be Tk 1 crore," Farah Kabir said.
She called for setting up a fund for innovation and research to boost the sector.
There is no change in the behaviour of banks in providing loans to CMSMEs despite the calls for bankrolling them growing louder.
"The Bangladesh Bank should set a target and ensure accountability," Kabir said.
The government target to transform Bangladesh into a developed economy by 2041 would not be possible without creating entrepreneurs, said Md Mafizur Rahman, managing director of the SME Foundation.
"So, training and patronising CMSMEs is needed," he said.
CMSMEs mainly meet the local demand and their business had been impacted due to the pandemic.
"SMEs are the lifeline of an economy, so the government should take steps so that they remain alive," Rahman said.
The government can arrange funds for the affected entrepreneurs at a lower interest rate, he added.
"Our demographic dividend will disappear after 2030, so we have little time to use the power of the youth," said Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry.
He said Covid-19 had not come for two or three years, so the loan moratorium for a single year was not the solution.
According to the business leader, women entrepreneurs contribute 22 per cent to the gross domestic product. "Did they get the same share in the stimulus packages?"
"The government should have a database to deliver incentives to the CMSME sector."
The budget has proposed a 15 per cent value-added tax for Facebook-based businesses, and this would impact the entrepreneurs, the DCCI chief said.
"As banks are not providing loans to CMSMEs at an expected level, the government can think of an alternative mechanism to provide the stimulus package," said Abul Kasem Khan, chairperson of the Business Initiative Leading Development.
CMSMEs face hassles in securing trade licences and necessary documents, he said, urging the government to address the issues.
"Even if the stimulus package is implemented fully, no more than 6 per cent of CMSMEs will get the benefits," said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.
Bangladesh Bank should take proper initiatives so that banks provide loans to the CMSMEs, he added.
The government has a plan to turn the country into a developed nation where the contribution of the youth is needed, said Biren Sikder, a member of the parliamentary standing committee on the planning ministry.
"We are enjoying demographic dividend now. This opportunity doesn't come always. So, we should use it properly."
There are 1.3 crore CMSMEs in Bangladesh, accounting for 35.5 per cent of jobs, said Md Hatem Ali, deputy manager of Young People of ActionAid Bangladesh, during a presentation.
In Chattogram, there are around 3,000 women entrepreneurs. Only four of them received the benefit under the stimulus package, said Rebeka Nasreen, a director of the Chittagong Women Chamber of Commerce & Industry.
Anir Chowdhury, the policy adviser of the a2i Programme, Mirza Nurul Ghani Shovon, president of the National Association of Small and Cottage Industries of Bangladesh, Mousumi Islam, president of the Association for Grassroots Women Entrepreneurs, and Husne Ara Shikha, general manager of the SME and Special Programmes Department at Bangladesh Bank, also spoke.
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