SMEs can now raise up to Tk 30cr from capital market

SME Foundation yesterday signed a memorandum of understanding (MoU) with Dhaka Stock Exchange (DSE) to help small and medium enterprises (SMEs) raise up to Tk 30 crore in funds from the capital market for expanding their businesses.

"This opportunity will undoubtedly usher in a new era for the SME sector," said Md Mafizur Rahman, managing director of SME Foundation. He and Tarique Amin Bhuiyan, managing director of the DSE, signed the agreement on behalf of their respective organisation.

However, simply signing the MoU is not enough as it now needs to be successfully implemented, he added.

"At present, there is an opportunity to raise capital ranging from Tk 5 crore to Tk 30 crore but the change in definition of SMEs will further increase the amount," said Bhuiyan.

Rahman said the SME sector in India accounts for 60 per cent of the country's economy while it was about 70 per cent in both China and Japan but only 25 per cent in Bangladesh.

"SME Foundation is working towards building the capacity of entrepreneurs to increase this rate. One of the biggest problems faced by SME entrepreneurs in the country is the capital crisis," he said.

In order to solve that crisis, the Bangladesh Securities and Exchange Commission (BSEC) has framed rules to allow SME entrepreneurs to raise capital from the market, Rahman added.

DSE Chairman Eunusur Rahman said the government announced a two-phase stimulus package for the SMEs amidst the ongoing coronavirus pandemic but most of them were unable to get the benefit due to various complications.

"But this is a great opportunity for the SMEs to raise funds from the stock market because the market is the most reliable place to raise long-term capital," he added.

The DSE launched a "DSE SME" platform from April 30, 2019, as per the BSEC (Qualified Investor Offer by Small Capital Companies) Rules, 2018, with a view of creating opportunities for small entrepreneurs to extract capital from the market.