• Wednesday, Dec 01, 2021
  • Last Update : 11:34 pm

SMEs seek expedited process for disbursing stimulus funds

  • Published at 09:29 pm July 22nd, 2020
WEB_Cabinet-meeting-presided-over-by-Prime-Minister-Sheikh-Hasina-approves-the-draft-SME-Policy-2019-on-Monday-SYED-ZAKIR-HOSSAIN
Representational photo Syed Zakir Hossain/Dhaka Tribune

SME stakeholders opined that the businesses were experiencing the worst scenario ever, while the entrepreneurs were not enjoying adequate loan facility from the stimulus packages

Members of old Dhaka's business community and trade leaders on Wednesday urged the government to expedite disbursement of stimulus packages for small and mediums enterprises (SMEs) and also to find alternative financing sources beyond the banks.

They made the call at a virtual dialogue organized by the Dhaka Chamber of Commerce and Industry (DCCI) with old Dhaka-based business associations to identify actual problems faced by SMEs in getting bank loans from the stimulus package.

Taking part in the virtual dialogue, SME stakeholders opined that the businesses were experiencing the worst scenario ever, while the entrepreneurs were not enjoying adequate loan facility from the stimulus packages.

They urged the government for speedy disbursement of stimulus packages and for allowing SMEs to pay value added tax (VAT), tax and all utility bills through equal installments in next six months for sustaining their businesses.   

“About 13 million MSMEs are contributing 25% to the country’s GDP and 35.5% of total employment. They are also contributing to export earnings ranging from 75% to 80%. But the sector is hit hard by the Covid-19 pandemic,” said DCCI president Shams Mahmud.

Despite having larger contributions to the economy, banks are reluctant to disburse loans from the stimulus package to the micro, small and medium enterprises (MSMEs), Mahmud claimed.

On top of that, MSMEs sometimes face challenges in access to finance, market linkage, product standardization, modern technology and training, as well as lack of skilled manpower, said the business leader.

Suggesting to look for alternative sources of financing besides the banks, Mahmud said DCCI is planning to sit with the banks and try to figure out the procedures that SMEs need to comply with to get bank loans from the stimulus.

He also urged the government to announce 2021 as the year of CMSME sector. 

"We need SME-linked foreign direct investment (FDI) policies to make the CMSME sector grow further, he added.   

"We could not sell any products during this pandemic time, which hit the sector hard. On the other hand, we are also not getting adequate support from banks to get loans from the stimulus,” said Md Alauddin Malik, president of Local Garments Manufacturers Association.

Meanwhile, the business community emphasized employment generation to pull people out of unemployment caused by the pandemic.

“Small enterprises combined create a big conglomerate, and large businesses are mostly dependent on SMEs. We have to create employment opportunities as it is the main concern now in a country like Bangladesh,” said Hossain Khaled, managing director, Anwar Group of Industries.

"Due to Covid-19 pandemic our sales came down to 35% which would have many negative ripple effects. Unbanked SMEs may not be benefitted by the stimulus and may face a grave challenge. We need to bring the unbanked entrepreneurs in the banking channel," he demanded.

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