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 speakers at a virtual dialogue on Sunday.
They opined that at present, 6% of the stimulus package has gone to cottage and micro enterprises, while women entrepreneurs have received 6% of the same.
The remarks came up in a virtual dialogue on “Redesigning a 2nd Stimulus Package for Economic Recovery of CMSMEs” organized by Business Initiative Leading Development (BUILD) on zoom on Sunday.
Husne Ara Shikha, General Manager (SME & Special Programmes Department), Bangladesh Bank joined the dialogue.
She said the Bangladesh Bank is working to support employment generation by allocating funds to organizations like Karmasangsthan Bank, Prabashi Kalyan Bank, and so on, added the Bangladesh Bank GM (SME-SPD).
“As cottage and micro are informal sector, these are difficult to reach through banking channels, while microfinance institutions are not willing to take loan from FSP as it is not profitable to them.
Regulatory simplification as well as strengthening work area of successful institutions should get more emphasis. Since working capital infrastructure is yet to be built properly”, she added. Abul Kasem Khan, Chairperson of BUILD presided over and moderated the session.
Dr. M Masrur Reaz, Chairman, Policy Exchange of Bangladesh delivered a presentation on “Redesigning Stimulus Package for Economic Recovery of CMSMEs”.
Highlighting global and national impact of covid, he mentioned that in Bangladesh GDP growth decelerated from 8% in FY19 to, while the RMG sector has faced cancellation order worth $3.2bn, leading to loss of jobs of 24,000 workers between April and June 2020. There has been a 39% drop in Domestic and FDI proposals in FY20, while import of Capital Machinery & Disbursement of Industrial Loans Dropped.
Rizwan Rahman, DCCI President 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.
Dr. Md. Mafizur Rahman, Managing Director, SME Foundation urged that bank-client relations criteria needs to be readdressed to avail FSP. Proper coordination among focal point of a Bank & local branches is required. BUILD should be invited to join SMEF to assist Electronic Database for SMEs in collaboration with a2i. Women entrepreneurs are mostly deprived, as they received 5% of the first stimulus package. 30% FSP should be allocated for WEs in second FSP.
Monowara Hakim, President, Chittagong Women Chamber of Commerce & Industry highlighted the deprivation of WEs in availing FSP. Bankers should be trained to deal with WEs with utmost care. Business associations and chambers should be linked with Banks to disburse FSP.
Akhil Ranjan Tarafder, General Manager, BSCIC identified a certain lack of awareness about BB circular among scheduled bankers. BB should take initiative to reach all the BB Circular to scheduled banks. Bank-client relations as the set criteria to avail FSP is one of the biggest problems.
Mohammad Nazmul Avi Hossain - Programme Officer, ILO, mentioned that financial stimulus package should be treated at package of multiple purpose. These should address Financial Literary along with other Technology & Technical issues. SME workforce should be provided with subsidy.
Ferdaus Ara Begum, CEO, BUILD concluded the meeting by sharing the workplan of BUILD going forward.
