Entrepreneurs of small and medium enterprises (SMEs) in the country receive credits for only 33% of their demand, said the SME Foundation.
In addition, rural entrepreneurs receive only 19% of the total loans disbursed in this sector, the organization said at a national seminar in the capital’s Agargaon on Monday.
According to the SME Foundation, small and medium-sized entrepreneurs were the ones that suffered the most from the Covid-19 pandemic, with 94% of companies experiencing a decrease in sales and 21% closing.
Speaking at the seminar titled “Rethinking MSME Finance: A Post-Crisis Policy Agenda” organized by the SME Foundation and UNESCAP, the Managing Director of the SME Foundation, Md Mafizur Rahman, said: “Research conducted by various public organizations and Private companies have shown that 37% of workers in these small and medium-sized companies had lost their jobs, and 70% were at risk of losing their jobs.
Around 83% of companies face losses and 33% have not been able to pay credit installments, he said.
“Therefore, in order to overcome the losses of small and medium-sized enterprises, it is necessary to increase the amount of the incentive package from the government. If the incentive package is not renewed, it is necessary to provide them with concessional financing,” Mafizur Rahman. said.
As the main guest, the Secretary for Industries, Zakia Sultana, said: “The SME sector contributes 85% of employment in the country’s industrial sector. The SME Foundation is working on the development of the SME sector to increase its contribution to the country’s economy”.
SME Foundation Chairman Md Masudur Rahman said, “SME entrepreneurs need easy loans to make up for the loss from the pandemic. Digital services can be introduced to make it easier for entrepreneurs to get loans.”
Delivering the keynote speech, Bangladesh Institute of Bank Management Associate Professor Musharraf Hossain said, “Out of the country’s 81 lakh SMEs, 58 lakhs (about 70%) are outside urban areas, but urban entrepreneurs receive 81% of SME loans, while women entrepreneurs get only 6% of the total loan.”
In the context of the pandemic, the seminar was organized to gather the opinion and recommendations of experts on how to bring small and medium-sized entrepreneurs closer to easy credit through the development and expansion of technology (digital financing and fin-tech).
Going forward, UNESCAP will carry out the necessary programs and strategies in Bangladesh based on the feedback and recommendations received.
The seminar was attended by senior representatives from the Economic Relations Division, Bangladesh Bank, commercial banks and financial institutions, SME entrepreneurs, researchers and academics, and media representatives.
Three papers on SME financing were presented at the seminar, one by a researcher from Bangladesh and the other two by researchers from the United States and Germany.