Staff Reporter :
Overall 66 per cent revenue decreased in the country’s SME sector due to low consumers’ demand amid the ongoing Covid-19 pandemic, a study said.
It also said 39 per cent of the SMEs have cut down their salary costs by 25-20 per cent to keep their businesses afloat amid the pandemic.
Reduction of purchasing orders, loans repayment, disruption of supply chain, procedural complexities of getting loans and inability to increase loan repayment duration are the big challenges for the sector, the study said.
Recovering the situation, cottage and micro enterprises should be separately grouped and targeted apart from small and medium enterprises so that their access to the stimulus packages can be increased, said Husne Ara Shikha, General Manager (SME & Special Programmes Department) of the Bangladesh Bank.
She was speaking in a virtual dialogue on “Redesigning a 2nd Stimulus Package for Economic Recovery of CMSMEs” organised by Business Initiative Leading Development (BUILD) on Sunday. Abul Kasem Khan, Chairperson of the BUILD, presided over and moderated the session.
Husne Ara Shikha said that currently 6 per cent of the announced stimulus package has gone to cottage and micro enterprises, while women entrepreneurs have received 6 per cent of the incentive.
Bangladesh Bank is working to support employment generation by allocating funds to organisations like Karmasangsthan Bank, Prabashi Kalyan Bank, and so on, she added.
M Masrur Reaz, Chairman of the Policy Exchange of Bangladesh, delivered a presentation on “Redesigning Stimulus Package for Economic Recovery of CMSMEs.”
Highlighting global and national impact of Covid-19, he mentioned that in Bangladesh GDP growth decelerated from 8 per cent in FY-19 while RMG sector faced cancellation of orders worth $3.2 billion, leading to loss of jobs of 24,000 workers between April and June 2020.
There has been a 39 per cent drop in domestic and FDI proposals in FY-20, while import of Capital machinery and disbursement of industrial loans dropped, Reaz said.
He mentioned that 3,046 big enterprises borrowed Tk 25,411 crore as working capital and the private sector credit growth stood at 8.2 per cent in the last November which is the lowest in recent years.
He further said low consumer demand has had a detrimental impact on small businesses, who are suffering from cash crunch and low revenues.
He noted that 66 per cent overall decrease in revenue in the SME sector and 39 per cent of the SMEs have cut down their salary costs by 25-20 per cent to keep their businesses afloat.
Rizwan Rahman, President of the Dhaka Chamber of Commerce and Industry (DCCI), suggested that definition of SMEs needs to be clarified and national database for SMEs should be set up.
Cash flow-based financial transaction and reduction of documentation costs should be reduced, he said.
Md Mafizur Rahman, Managing Director of the SME Foundation, said bank-client relations criteria needs to be readdressed to avail the stimulus packages.
