The SME Foundation is about to form an electronic database of businesses in the sector with the help of the Access to Information (A2i) Program and the World Bank to ensure the development of small and medium entrepreneurs.
According to stakeholders and policymakers, a database can help to formulate targeted policies, specifically for the informal sector and its marginalised demographics by identifying obstacles or barriers from diverse data sets that will be collected from the entrepreneurs.
A recent survey done by the Centre for Policy Dialogue (CPD) showed that medium-sized enterprises and urban area demographics could easily avail the government’s stimulus package to sustain the economic shock from the pandemic, in contrast to the large informal sector of micro-small enterprises and marginalized demographic such as women entrepreneurs.
Experts say a lack of updated data has left small and micro-cottage businesses to miss out on incentives specifically targeted to sustain the shock of the pandemic as the policies were formulated in a top to bottom approach rather than bottom to top.
The lack of funding during the Covid-19 pandemic posed severe challenges across all areas of research and public policies across the globe, especially in Bangladesh, making policy formulation equally difficult.
As per CPD, if data is available, the links between public policies and research can be assessed further to define how the challenges of underserved businesses should be addressed.
“A database is crucially needed to form data sets that will give us a clearer picture of the whole sector by defining geographic and demographic variables. However, the lack of access to updated and current data sets from data recording and statistics analyzing institutions such as the Bangladesh Bureau of Statistics (BSS) needs to be addressed first,” Dr Khondaker Golam Moazzem explained to Dhaka Tribune.
More funding is needed to propagate research that provides data for a bottom to top approach in contrast to the top to bottom approach, which was unable to provide enough support for the marginalized community as well as SMEs and women entrepreneurs.
"The private sector grew by many folds over the years, however, we do not have updated data to know who is being affected, how they are being affected and how we can address them,” Md Masudur Rahman, chairman of the SME Foundation, told Dhaka Tribune.
“We will compile a complete database by collecting information of small and medium entrepreneurs across the country through the Union Digital Centres (UDC).”
“The database can help us to get a clear picture by acquiring information from these businesses on their productivity, the number of job creations, the demand and other variables which will help to decide where we should focus our limited resources,” he added.
However, upon asking if the database has the potential to address issues such as availing loans from banks by small entrepreneurs, the SME Foundation official said that the compilation of the database will give them the data as to where the problem actually lies and the cause of it, which could then be targeted with a concentrated approach.
As per official data, the SME contributes to around 25% of the GDP and accounts for 99.93% of business establishments of the country.
As per the foundation, the pilot project of e-database will initially start from the union level and will gradually be implemented in upazila levels later.
However, it was not mentioned which union or upazila they will start off with.
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