Former Governor of Bangladesh Bank and Bangabandhu Chair of Dhaka University Professor, Dr Atiur Rahman believes that at least Tk 20,000 crore more needs to be allocated for the government's policy support for the SME sector to offset the post-Covid-19 losses.
He made the recommendation at a report titled 'The Future of SMEs after the Corona Crisis: Challenges and Opportunities' organized by SME Foundation and FES Bangladesh on Tuesday.
In the main article of the report titled 'The Future of SMEs after the Corona Crisis: Challenges and Opportunities' published by SME Foundation, former Governor of Bangladesh Bank and Bangabandhu Chair Professor of Bangabandhu University of Dhaka . SME Policy 2019 is an effective initiative of the government for the development of infrastructure and clusters in this sector.
At the same time, the policy also looks at the market connectivity of SME products. He added that due to coronavirus, the revenue of small and medium enterprises has decreased by 66% and 76% of the products have remained unsold. 42% of the workers in this sector have received partial salary, 4% of the workers have not received any salary.
In such a situation, he suggested allocating at least Tk 20,000 crore more to the SME sector to offset the losses. He also said that most of the funds of the International Monetary Fund (IMF) are going to the developed countries to offset the damage caused by the coronavirus.
According to him, special attention needs to be paid to the SME sector to overcome the damage caused by coronavirus.
Dr. Atiur Rahman said India has allocated 38% of the total incentive package for the SME sector, Thailand 33% and Malaysia 24% to offset the loss of coronavirus, but Bangladesh has allocated only 22%. Therefore, he suggested increasing the government's incentives for the SME sector. He made recommendations to overcome the losses of the SME sector in the aftermath of COVID-19.
The recommendations included, full implementation of SME Policy 2019, cluster-based SME development, Initiatives to verify and select the loan disbursement process of SMEs under the supervision of SME Foundation, creating a digital dashboard to monitor the disbursement of loans in the incentive package, create linkages between banks and mobile banking institutions in the loan disbursement process and develop bank-customer relationships, giving priority to export-oriented SMEs and women entrepreneurs, giving priority to environmentally friendly SMEs.
Industries Secretary Zakia Sultana said SMEs are the driving force of Bangladesh's economy. This sector has been severely damaged due to Covid-19. The government has already provided incentive packages and policy support to the SME sector to offset this loss.
He also expressed hope that the SME Foundation would be able to disburse Tk 200 crore in the current financial year as well as Tk 100 crore in the last financial year under the government's incentive package for SME entrepreneurs.
SME Foundation Chairperson Prof. Md. Masudur Rahman said that in the context of coronavirus, it has been possible to distribute Tk 15,000 crore among only 95,000 SME entrepreneurs as part of the government's incentives.
However, according to the economic statistics of 2013, the number of small and medium enterprises in the country is more than 78 lakh. Therefore, it is necessary to increase the capacity of SME Foundation for the development of SME sector in the country. He also mentioned the need for structural and policy reforms in the development of the SME sector.
Former Governor of Bangladesh Bank and Bangabandhu Chair Professor Dr. Atiur Rahman of Dhaka University was the keynote speaker at the event presided over by Prof. Dr. Md. Masudur Rahman, Chairperson of SME Foundation. The keynote address was delivered by Dr. M Mofizur Rahman, Managing Director, SME Foundation, and discussed by Dr. M Abu Yusuf, Professor, Dhaka University, Prof. Dr. Shahadat Hossain Siddiqui, and Dr. Nazneen Ahmed, Country Economist, UNDP. Dr. Md. Mofizur Rahman, Managing Director of SME Foundation gave a welcome speech on the occasion.
