Bangladesh Bank data stated that the banks and NBFIs disbursed Tk 31,444.09 crore in loans to the SMEs located in the rural areas in 2016 under the Bangladesh Bank’s SME credit programme while they distributed total Tk 1,41,935.38 crore under the programme in urban belts in the period. The five state-owned commercial banks – Sonali, Janata, Agrani, Rupali and BASIC – disbursed Tk 554.58 crore in the rural areas, or 12.99 percent of their total distributed SME loans of Tk 11,170.84 crore, in 2016. However, the SME loan disbursement in 2016 increased by 22.49 percent to Tk 1,41,935.38 crore in 2016 from that of Tk 1,15,870.48 crore in 2015. It is known to all that a few businesspeople of the country are getting the major share of credit from the banking sector by using their influence. The government should take initiatives to make the SME Foundation more active so that it can play its role in creating SME sector entrepreneurs in the rural areas. Because, such funding in rural initiatives would bring more jobless youths in employment resulting in enhanced income for rural people and thus benefit the economy in turn.
The main constraints faced by the country’s SMEs include paucity of freehold land, poor infrastructure facilities and utility services, weak legal and regulatory framework, inadequate access to finance, lack of skilled workforce, and poor business support services. The government needs to undertake a strategy to support the development of the SME sector of the country, particularly in rural bases. To flourish the country’s SME sector, the government should encourage the entrepreneurs to get involved in export and break the bottlenecks. Loan disbursement for encouraging SMEs is a bold decision of the Central Bank but the effect of the loan could not be achieved unless rural enterprises are properly addressed as still the vast majority of our nationals live in rural areas. The Central Bank should provide guidelines fixing the ratio of loan disbursement between rural and urban SMEs.
