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Traders demand a separate ministry for the development of small and medium industries

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To save the small and medium industries, the mentality of all government organizations including banks must be changed. Also, top business organizations feel that there should be political will in formulating SME friendly policies. In a seminar in the capital on Monday, the speakers said that the banks are reluctant to give loans to small entrepreneurs. Meanwhile, the demand for a separate ministry for the SME sector was also expressed.

90% of the private sector employment in the country is provided by the SME sector. But even though there are more than 75 lakh small and medium entrepreneurs in this sector, it contributes only 25 percent to the GDP. It is much less than China, Cambodia, Sri Lanka, Malaysia and even Pakistan-India.

The growth rate of the CMSME sector has slowed down despite the fact that loan interest rates have come down to single digits during the Corona period. Business leaders demand change in definition of SME. Otherwise, government and central bank policy support will fill the pockets of medium entrepreneurs.

Dhaka Chamber of Commerce and Industries (DCCI) president Samir Sattar said, ‘SME development needs to be given special facilities. The government also provides special facilities to the SME sector. But the medium enterprises of this sector took the opportunity. As a result, the small and cottage industries are affected by various adverse conditions, they can no longer stand up. Small and cottage industries have suffered losses due to the corona pandemic, Russia-Ukraine war is also suffering losses. They have not received or are not receiving incentives from the government. To promote the SME sector, medium enterprises should be separated from small and cottage industries, so that the whole of the initiative can be utilized to promote these industries.’

The SME sector has challenges in increasing product quality and efficiency, says Masudur Rahman, chairman of the SME Foundation. He called for giving importance to local products in government purchases.

Masudur Rahman said, ‘The SME sector of Bangladesh is behind compared to the competing countries. Because financing is scarce and interest rates are high. In every case, the SME sector is facing obstacles. Innovative ideas are needed on how to facilitate lending to the SME sector. Market access should be facilitated to exploit the potential of the SME sector. Many times SME entrepreneurs cannot enter the market due to middlemen. Middlemen do not allow entrepreneurs to grow.’

In the seminar at the ERF office on Monday, the suffering of small entrepreneurs to get loans came up again and again. FBCCI president calls for bankers to change their mentality. And the bank hopes to change the situation through staff training.

Mehmud Hossain, Managing Director of National Bank said, ‘There is a psychological problem in lending to the SME sector. A loan requires many documents. But bankers, entrepreneurs are not interested in this. Skill shortage is one of the reasons for this. Due to this lack of interest, the SME sector is lagging behind. Banks in Bangladesh have set loan targets for the SME sector. But achieving that is challenging.’

Bangladesh Bank aims to disburse 25 percent of total loans to the SME sector by 2024.


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