Staff Reporter :
The government should help millions of micro merchants with small credit disbursing quickly through digital financial channels to revamp the ailing economy already hit by corona pandemic and devastating floods.
After a survey conducted by Bangladesh Journalists’ Forum for Consumers and Investors (BJFCI), the largest platform of senior journalists of leading dailies and media made this observation in its market report published on Sunday.
The survey was conducted among 85 micro merchants like small shop owners, street food vendors, vehicle drivers and many others like them who conduct business in countless neighbourhood roadside shops (MudiDokans) in the Dhaka city to understand the state of their business.
In the last five months, millions of micro merchants and millions of micro entrepreneurs remained standstill at their homes and spent their savings to maintain families, which pushed up the cash withdrawal figure of Bangladesh Bank at record level of Tk 40,000 crore, the BJFCI report observed.
“The government should introduce soft loan for micro merchants and micro entrepreneurs involved in cottage and micro industries who remained out of focus in its stimulus packages announced recently and such credit might be disbursed through digital channels as banks are disbursing most of the loans to medium industries”, the report says.
In many developing economies digital credit through mobile financial services has been proved as an effective tool to help micro merchants to get ride of poverty trap. Poverty rate is likely to increase in Bangladesh due to falling growth which may slide down to just over 2.0 per cent during the current fiscal year, BJFCI report said quoting the World Bank and the International Monetary Fund (IMF).
According to the survey, 95% respondents say they remained at their homes in the last five months for corona virus pandemic and could not feed their family members properly as they had no source of income. Now they are facing cash crisis to restart business to feed their family members.
Of the total micro merchants under the study, 76% micro merchants say they expect that the government will support them with a small amount of money as credit at lower rates as banks and financial institutions are reluctance to give them loan.
“As the government has eased restrictions, consumers are moving on the streets and buying goods, micro merchants and micro entrepreneurs are seeing light at the end of the tunnel. But the light may fade out soon as they have no money in hands to invest”, BJFCI Chairman Faruk Ahmed said in the report.
He said micro-merchants wish to grow their businesses and earnings, but access to finance is among their biggest concerns. They need a tiny amount of money to conduct day to day business. The government should help them digital credit through a collaborative model comprising of banks and mobile financial services. And the best way would be credit digitalization.
BJFCI says many cottage and micro-industries are on the verge of permanently shutting down as they have no working capital to survive as they are not getting loans from the government’s Tk 20,000 crore stimulus package. If they are not provided with stimulus the earnings of around 2.06 crore families will decrease significantly and many enterprises could be shut down which will push up unemployment in the country as well as poverty rate.
Now it is the time for the government to think about this crucial issue and take prudent policy to minimize the disparity between the rich and the poor.
When people across the country are battered by corona virus pandemic, weeks of torrential rains have destroyed the homes and livelihoods of millions of people, economy is likely to face setback due to lower spending and slower investment.
The UNCDF study says micro-merchants are the main actors of the retail industry and next growth agenda for South Asian countries like Bangladesh where over 1.1 million ‘micro-merchants’ are engaged in fast-moving consumer goods (FMCG) trade, according to a UNCDF study.
The foremost task for Bangladesh is to revive standstill economic activities and micro merchants and micro entrepreneurs should be its priority area where quick disbursement of small credit is urgent. And thus, focus on every aspect of agriculture and SMEs such as production increase, harvesting, storage, supply chain, food processing will should come under renewed focus. Micro credit is the right tool as it empowers poor women borrowers and to facilitate income-generating self-employment activities and to ensure socio-economic development.
The government should help millions of micro merchants with small credit disbursing quickly through digital financial channels to revamp the ailing economy already hit by corona pandemic and devastating floods.
After a survey conducted by Bangladesh Journalists’ Forum for Consumers and Investors (BJFCI), the largest platform of senior journalists of leading dailies and media made this observation in its market report published on Sunday.
The survey was conducted among 85 micro merchants like small shop owners, street food vendors, vehicle drivers and many others like them who conduct business in countless neighbourhood roadside shops (MudiDokans) in the Dhaka city to understand the state of their business.
In the last five months, millions of micro merchants and millions of micro entrepreneurs remained standstill at their homes and spent their savings to maintain families, which pushed up the cash withdrawal figure of Bangladesh Bank at record level of Tk 40,000 crore, the BJFCI report observed.
“The government should introduce soft loan for micro merchants and micro entrepreneurs involved in cottage and micro industries who remained out of focus in its stimulus packages announced recently and such credit might be disbursed through digital channels as banks are disbursing most of the loans to medium industries”, the report says.
In many developing economies digital credit through mobile financial services has been proved as an effective tool to help micro merchants to get ride of poverty trap. Poverty rate is likely to increase in Bangladesh due to falling growth which may slide down to just over 2.0 per cent during the current fiscal year, BJFCI report said quoting the World Bank and the International Monetary Fund (IMF).
According to the survey, 95% respondents say they remained at their homes in the last five months for corona virus pandemic and could not feed their family members properly as they had no source of income. Now they are facing cash crisis to restart business to feed their family members.
Of the total micro merchants under the study, 76% micro merchants say they expect that the government will support them with a small amount of money as credit at lower rates as banks and financial institutions are reluctance to give them loan.
“As the government has eased restrictions, consumers are moving on the streets and buying goods, micro merchants and micro entrepreneurs are seeing light at the end of the tunnel. But the light may fade out soon as they have no money in hands to invest”, BJFCI Chairman Faruk Ahmed said in the report.
He said micro-merchants wish to grow their businesses and earnings, but access to finance is among their biggest concerns. They need a tiny amount of money to conduct day to day business. The government should help them digital credit through a collaborative model comprising of banks and mobile financial services. And the best way would be credit digitalization.
BJFCI says many cottage and micro-industries are on the verge of permanently shutting down as they have no working capital to survive as they are not getting loans from the government’s Tk 20,000 crore stimulus package. If they are not provided with stimulus the earnings of around 2.06 crore families will decrease significantly and many enterprises could be shut down which will push up unemployment in the country as well as poverty rate.
Now it is the time for the government to think about this crucial issue and take prudent policy to minimize the disparity between the rich and the poor.
When people across the country are battered by corona virus pandemic, weeks of torrential rains have destroyed the homes and livelihoods of millions of people, economy is likely to face setback due to lower spending and slower investment.
The UNCDF study says micro-merchants are the main actors of the retail industry and next growth agenda for South Asian countries like Bangladesh where over 1.1 million ‘micro-merchants’ are engaged in fast-moving consumer goods (FMCG) trade, according to a UNCDF study.
The foremost task for Bangladesh is to revive standstill economic activities and micro merchants and micro entrepreneurs should be its priority area where quick disbursement of small credit is urgent. And thus, focus on every aspect of agriculture and SMEs such as production increase, harvesting, storage, supply chain, food processing will should come under renewed focus. Micro credit is the right tool as it empowers poor women borrowers and to facilitate income-generating self-employment activities and to ensure socio-economic development.
