Call for ensuring optimum stake of SMEs in new stimulus packages

The share of small and medium enterprises (SMEs) in the stimulus package is still lower than optimum despite their substantial contribution to the economy, according to a webinar on Tuesday.

In his keynote, former Bangladesh Bank governor Dr Atiur Rahman suggested that SMEs receive more fiscal support through the new stimulus package.

"A new stimulus package worth Tk 200 billion could be introduced immediately for the sake of the SMEs," he said, adding that manoeuvering the scheme with prudence would help the economy accelerate soon.

Dr Rahman was presenting the paper styled 'The Future of SMEs after the Corona Crisis:

Challenges and Opportunities' during a programme co-hosted by the SME Foundation (SMEF) and the Friedrich-Ebert-Stiftung (FES) Bangladesh.

Industries secretary Zakia Sultana joined the programme as the chief guest, while it was chaired by SME Foundation chairperson Prof Dr Masudur Rahman and moderated by managing director Md Mofizur Rahman.

Dhaka University professors Dr M Abu Eusuf and Shahadat Hossain Siddiqui, UNDP country economist Dr Nazneen Ahmed and FES Bangladesh resident representative Felix Colbitz, among others, spoke.

The keynoter says said the SME sector contributes almost 25 per cent to the national economy and employs almost 8.0-million people.

He identified lack of access to formal finance, limited participation of women, and absence of policy regarding pre-determined government procurement from the SMEs as some of the key challenges for their growth.

Last year, SME revenue decreased by 66 per cent due to the pandemic, 42 per cent employees received partial salary while 4.0 per cent did not receive salary at all, he said.

Dr Rahman also presented a set of recommendations for economic recovery through SME-friendly policies.

"We should pay attention to implement the SME Policy 2019 promoting the cluster development approach," he said.

He highlighted utilising the bank-MFI linkage, digital financial service, tracking progress and changing mindset.

Dr Rahman further said that the economic recovery should be green, inclusive and humane.

Secretary Ms Sultana says SMEs are the driving force of Bangladesh's economy which have been hit hard in the wake of Covid-19.

"It (SMEs) has a commendable contribution to the GDP growth, employment generation, women empowerment as well as export earnings," she adds.

The government has undertaken numerous schemes, including stimulus package, to help SMEs absorb the shock due to the adverse impact of the pandemic.

Ms Sultana hopes the SME Foundation will successfully disburse the credit fund of Tk 2.0 billion this fiscal year, as it successfully disbursed Tk 1.0 billion in the last fiscal.

SMEF chair Prof Masud says the stimulus package for the SME sector is lower in Bangladesh compared to neighbouring countries in Asia.

He underscored the need for enhancing capacity of the SME-related organisations in the country.