99% of the country's industrial units were CMSMEs
Experts on Thursday recommended increasing incentives for small and medium enterprises (SMEs) and also for implementing the SME Policy 2019 to cushion the economic blow inflicted by the Covid-19 pandemic.
They also urged the government to monitor banks and non-banking financial institutions whether they offer their services to SMEs or not, as well as to strengthen digital financial services, create digital dashboards to monitor loan disbursements for CSME entrepreneurs and increase training and skills required for SMEs to export their products.
The remarks were made at a webinar titled "The Pandemic and SMEs: Shock-absorbing Policy Measure and Future Debates - Impacts in Bangladesh and Lessons from Responses Around the World."
The SME Foundation and the Friedrich-Ebert-Stiftung (FES) Bangladesh Office jointly organized the webinar.
Vice Chairman of German Craft Industry Michael Roessler lauded the government's Tk20,000 crore stimulus package for cottage, micro, small and medium enterprises (CMSMEs), but also urged to increase more incentives so that they could tackle the post-pandemic challenges.
“In Bangladesh, 22% of the total incentives have been allocated for the SMEs. But in Malaysia, the rate is 24%, in Thailand it is 33% and in India it is 38%. To sustain the sector after the pandemic, incentives should increase,” said Dr Atiur Rahman, former governor of the Bangladesh Bank and professor of development studies at Dhaka University.
SME Foundation Chairperson Prof Md Masudur Rahman said increasing incentives was a big concern, as the SMEs are strategically important for the country's post-pandemic economic recovery.
“SMEs In Bangladesh generally sell their products during major festivals like the Bangla New Year (Pohela Boishakh) and Eid, but they have been hit hard by the countrywide shutdown because of supply chain disruption and stocks of unsold goods," he added.
The speakers also said that 99% of the country's industrial units were CMSMEs.
There are 7.8 million CMSMEs contributing to the national GDP at an estimated 25%. CMSMEs also account for 80% of the total employment.
Realizing this potential, the government formulated the National Industrial Policy 2016 and SME Policy 2019 and other guidelines in this respect.
Industries Minister Nurul Majid Mahmud Humayun acknowledged the challenges faced by the SMEs due to the pandemic.
"Compared to 2019, revenue from the SME sector has decreased by 66% in 2020 so far. The government has taken initiatives to help them solve these problems," he added.