Bangladesh Small & Cottage Industries Corporation (BSCIC)

Bangladesh Small and Cottage Industries Corporation (BSCIC) is the prime mover organization entrusted
with the responsibility of development of small and cottage industries (SCI) in Bangladesh. It is an
autonomous corporation under the Ministry of Industries and was established by an Act of the parliament in
1957. It is the successor organization of EPSCIC.
BSCIC Provides

Pre-investment counselling
Post-investment extension services
Technical information
Design and prototype of handicrafts
Industrial profiles and fact sheets
Marketing information
Infrastructural facilities
Skill development training
Entrepreunership developement training
In-plant advisory services
Credit facilities etc.

Introduction
Bangladesh Small & Cottage Industries Corporation (BSCIC) was established in 1957 by an Act of
Parliament. The establishment of BSCIC was in recognition of the need for a specialised agency to promote
the development of Small, Medium & Cottage Industries (SMCIs) in the manufacturing sector through the
provision of advisory services, fiscal and financial assistance, infrastructural facilities, market access and
other support programme.
BSCIC strives to create resilient and efficient SMCIs, able to compete in a liberalised market environment.
SMCIs have to be efficient and knowledge-driven, including using ICT to be globally connected and
accessible. The Corporation will promote SMCIs to be an integral part of the countrys industrial
development capable of producing high value-added manufacturing product & services. BSCIC will serve as
the national focal point for the over all development of SMCIs in the country.
The principal goal of the Bangladesh Govt. economic policy is to reduce poverty which is coherent with the
MDGs. For achieving the above goal economic growth policy is adopted by the Govt. in the macro-economic
policy. In view of the above the BSCIC Vision, Mission, Goal, Strategy, Initiative, Challenges, Needs,
Objectives, Services, Function and Programmes are fixed.
Vision
To be the leading Organisation in Developing Small, Medium & Cottage Industries that contribute to the
economic growth and to create vibrant and resilient SMCIs that enhance Bangladesh is competitiveness in
the world market. To transform SMCIs into an economic powerhouse of the country by 2025.
Mission
To materialize the vision following mission may be followed :

i) Providing latest technical and managerial assistance to enterprises and communities for the improvement
of productivity, quality and environment.
ii) Promoting strategic alliance with clients as well as national and international professional bodies in pursuit
of economic development.
iii) Molding a work place that en
courages creativity, innovation, professional growth and positive value.
iv) To instill and eventually ingrain deeply the concept of learning organisation into SMCIs and encourage
them to be export-oriented.
v) Sharing the rewards of own endeavors with our communities, customers, employees, suppliers,
management and our stakeholders.
Goal
a. To assist private entrepreneurs for establishing new Small, Medium & Cottage Industries (SMCIs) unit.
i) Total
: 0.409 million unit
ii) Small Industry
: 0.086 million unit
iii) Medium
: 0.008 million unit
iv) Cottage Industry
: 0.315 million unit
b. To create labour force employment facilities through new Small, Medium & Cottage Industries (SMCIs).
i) Total
: 3.06 million
ii) Small Industry Sector
: 1.54 million
iii) Medium
: 0.52 million
iv) Cottage Industry Sector
: 1 million
v) Percentage of new labour force employment

: 3.80%

(Total L/F 2005-2025, will raise 59-80 million)

vi) Percentage of total labour force employment

: 8.28% (6.63 million)

c. Contribution to GDP : 30% (Tk.1050 billion )

(To raise GDP in Small, Medium & Cottage Industries sector from 5% to 30%)
d. To raise daily income of employed poor labour force people in SMCIs sector from 1 US$ to 3 US$ through
poverty alleviation programme/projects undertaken by BSCIC and through private sector investment.
Cumulative Small, Medium & Cottage Industry unit and employment will reach by 2025 (figure in
million).
Category of Industry
Small
Medium
Cottage
Total

Unit
0.171
0.013
0.904
1.088

Employment
2.915
0.863
2.852
6.630

Objectives
The BSCIC functionaries are deliberated up on the organizational objectives having rellevance to the BSCIC
charter (Act xvii of 1957) and subsequent jobs assigned to the BSCIC. The objectives and key results areas
have been identified and described below:
Objectives
1. TO ENSURE

Key result areas

a. Promoting the establishment of industrial units, with priority for agro-

ACCELERATED

support, agro-processing, import substitution and export oriented

GROWTH OF

enterpriese utilizing indigenous raw materials.

THE SMALL,
MEDIUM AND
COTTAGE
INDUSTRIES IN
BANGLADESH
(CREATION OF
NEW
CAPACITY)
b. Promoting establishment of small, medium industry through ancillary
units and sub-contracting arrangements.
c. Promoting area/regional development through establishment of small
scale industries on the basis of locally available raw material, skills and
growth potential as per district development plans.
d. Providing information to target people on industrial investment
opportunities through mass media (including Radio, Television and News
Papers) and publications.
2. TO INCREASE

a. Assisting existing enterpriese to operate at optimum capacity.

PRODUCTIVITY
OF THE
EXISTING
SMALL,
MEDIUM AND
COTTAGE
INDUSTRIAL
UNITS IN
BANGLADESH
(RESOURCE
MAXIMIZATION
OF EXISTING
CAPACITY)
b. Providing counselling and extension service including in-plant-advisory
services, group services and training programmes on technical quality
control, marketing and financial management exports.
c. Supplying statistical information and operational data for inter-firm
comparison on productivity.
3. TO ENSURE
OPTIMUM

a. Providing advisory services to the enterpreneurs for proper utilization of

financial resources of their industrial units.

UTILIZATION OF
FINANCIAL
RESOURCE
b. Proper financial analysis and pre-investment feasibility for proper
utilization of loan and equity financing resources.

c. Ensuring timely loan recovery for further investment.

4. TO PROVIDE

a. Setting up the infrastructure such as Industrial Estates and Common

INFRASTRUC-

Facility Centres, Design Centre etc.and ensure their optimum utilisation

TURAL

required by the industrial units.

FACILITIES
b. Maintaining efficiently the facilities such as electricity, gas, water, roads
etc. for uninterrupted production of the units set up in the Industrial
Estates.
5. TO CREATE
AND DEVELOP

a. Assisting in the creation of market (local and foreign) through appropriate

sales promotion measures.

MARKETING
FACILITIES
INCLUDING
MARKET
INFOR-MATION
FOR
PRODUCTS OF
SMALL,
MEDIUM AND
COTTAGE
INDUSTRIES
b. Providing assistance and advisory services to small enterprises for
maintaining quality product by fixing appropriate standard.
6. TO INNOVATE
PRODUCT

a. Collecting and disseminating information on new and appropriate

technology for the sector as a whole.

PROCESS AND
TECHNOLOGY
b. Promoting research work for the development of product, process and
technology.
c. Making and supplying designs and prototypes for the cottage industry
sub-sector.
d. Designing and supplying prototype of product, machinery, equipment and
tool for small industries.
7. TO ENSURE
DEVELOPMENT

a. Developing knowledge and skills of artisan/ crafts, technicians and

managers through training.

OF SKILLS
b. Designing, developing and conducting entreprenuership development
programme for small and cottage industries.
8. TO HELP

a. Promotion of pilot projects in association with private entreprenuers in

SOCIO-

areas or fields of national interest where private investment is shy and

ECONOMIC

hand them over at an appropriate private time.

DEVELOPMENT

b. Creating linkage with Youth Welfare, Women affairs, Social Welfare and
other organisation engaged in the promotion of income generating
activities, with the aim of achieving integrated rural development.
c. Assisting and advising in the promotion of industrial homes adjacent to
industrial areas for the Welfare of family members of industrial workers.
d. Generating income among disadvantaged target people and in
geographically under-developed areas by setting up cottage industries.
In the light of globalization, BSCIC refix its objectives in the following manner :
i) To create a healthy business environment that promotes and supports the establishment and growth of
SMCIs.
ii) To nurture high growth, resilient, innovative SMCIs that adopt best business practices.
iii) To enhance the technological, managerial, marketing, financial and entrepreneurial capabilities of SMCIs
to become globally competitive.
iv) To encourage enterprises and entrepreneurs to harness technology and knowledge in developing high
value-added products and services and moving up the value chain.
v) To facilitate and assist SMCIs to gain access to market by forming linkages and business opportunities
network, both locally and internationally.
vi) To foster the formation of a competitive and vibrant supply base to attract FDIs into the country.

Strategy
Strategy 1: Upgrade technological and management capabilities of SMCIs.
Develop an enterprise diagnosis system as a tool for the promotion of SMCIs.
Enhance consultancy system for business improvement and problem solving.
Support the adoption of modem facilities and management systems such
as ISO 9000 and TQM. Support the efforts of companies to improve their product quality.
Improve the efficiency of R&D institutes and facilitate their networking with private
companies.
Strategy 2: Develop SMCIs. entrepreneurs and human resources
Foster new entrepreneurs and incubate existing entrepreneurs.
Enhance the efficiency and flexibility of training services.

Improve the efficiency and coverage of industrial skill standards and certification systems.
Improve educational curriculum and teaching methods to meet industry needs.
Strategy 3: Enhance SMCIs access to markets
Improve SMCIs access to government procurement systems.
Promote subcontracting and linkages with large enterprises. both domestically and internationally.
Strengthen the export promotion activities of SMCIs
Promote cross-border trade and linkages with trading companies.
Strategy 4: Strengthen financial support system for SMCIs
Expand and develop credit guarantee system for' SMCIs
Establish venture capital funds for the development to SMCIs
Establish SMCIs Promotion Fund.
Strengthen financial advisory services for' SMCIs
Strategy 5: Foster an environment conducive for business development
Establish and strengthen local information center for SMCIs
Develop mechanism to review and revise laws, regulations and
administration procedures to redress problems facing SMCIs
Strengthen support to equip SMCIs to prepare for the IT revolution.
Improve the efficiency of various distribution channels.
Strengthen the planning capabilities and services of regional and local authorities
and organizations. Promote the establishment of SMCIs parks.
Strategy 6: Develop micro-enterprises and community enterprises
Incubate "strategic" micro-enterprises and community enterprises.
Promote commercialization of indigenous know-how.
Upgrade the managerial capabilities of micro-enterprises and community enterprises.
Encourage the formation of business associations among these enterprises.
Strategy 7: Develop networking among SMCIs and clusters
Conduct studies of various industrial clusters to promote their efficiency collectively.
Support pilot projects to develop industrial cluster(s) in each region.
Encourage the formation of business associations to serve as platforms of fostering
cooperation among members.
Provide infrastructural support and financial incentives to promote the development SMCIs
Key Issues and challenges
The following are key issues and challenges faced by SMCIs.
Liberalization and Global competition
Multilateral and regional trade and investment liberalization policies have made markets more accessible and
competition more intense among local producers. It is becoming increasingly imperative to be internationally

competitive in order to function effectively even in domestic markets. In a dynamic environment market by
fast technological changes, achieving and retaining competitive edge is a necessity and a challenge. Many
SMCIs could be efficient exporters if they were properly motivated and assisted in acquiring the necessary
skills supported by a strong infrastructure and given the right advice and assistance.
New Emerging Technologies.
Most SMCIs donot see the importance of ICT applications in their daily operations. They do not realize that
emerging technologies and advances in ICT have contributed to productivity growth and economic
competitiveness. The increasing use of ICT in business is making it possible for large companies to secure
multiple suppliers. These suppliers have to meet the requisite product quality, cost and speedy delivery with
in a compressed time frame with competitiveness being increasingly determined by leading edge
technologies, it is crucial that SMCIs rapidly develop their capacity to adopt and adapt technologies that are
appropriate to their industries.
Skill Development.
Most SMCIs are labour intensive. Skills upgrading and knowledge acquisition, which are all critical to long
term competitiveness. SMCIs have a negative attitude towards investment in training. They fear losing well
trained staff to other companies and their investment. There is a need to change this perception and mindset
and to inculcate a training culture among SMCIs. The in sufficient supply of skilled and knowledgeable
workforce impedes output expansion. Therefore, the ultimate objective is to produce skilled and
knowledgeable workers for SMCIs to be competitive in quality price and delivery.
Finance.
The most cited problem confronting SMCIs is the inadequacy of finance. A key reason is SMCIs are seen as
high-risk by the average banker, SMCIs traditionally finance their operations through own savings, loan from
families and friends, as well as supplier credits. New start-ups face difficulties in securing credit, as they have
little collateral and no track record. In addition, their is the problem of long processing time for loan
application, while their shoud be a balance between meeting the needs of SMCIs and prudent banking
practices. The solution still lies in improving access to institutional credit for SMCIs. This is a critical factor
because a loan delayed is vartually a loan denied.
Information.
The ability to seek and apply information in business operations will help SMCIs to be efficient in the new
business environment. As knowledge is pivotal in modern manufacturing, SMCIs need to acquire critical
knowledge and skill to mermain competitive. Technology and knowledge investments have provided
significant competitive edge to companies especially in design, product research, process, innovation and
management information system, SMCIS thus, need a referal centre to which they can turn for information
and advice on the various areas concerning their operations.
SMCIs need the following policy support
*

Ensure flows of public expenditure (research, extension, training and market promotion)

Stimulate private investment through proper guidance and pre-investment counseling.

Rationalize tax structure (by raising ceiling of exemption limits as regards taxation and by lowering the
VAT rates )

Provide marketing assistance

Stimulate sub-contracting activities (support for ancillary activities and producers of spares and
machinery need to be ensured in light of GOBs sub-contracting policy, including through procurement
and purchase policy of the government).

Design a credit guarantee scheme for agro-based small-scale entrepreneurs who do not have the
necessary collateral.

Create a database for the small and medium scale industries

Channel funds to the small entrepreneurs without collateral through innovative banking.

Increase of the limit of collateral free loan and keep interest rate low 10%.

Formation of cluster village

Establish a training and design centre.

Ensure more collaboration/partnership among the organization/agencies.

BSCIC TO PROVIDE SERVICES TO ACHIEVE GOAL

The BSCIC provides the following services to the private sector entrepreneurs of the three clientele groups
(educated solvent, semi literate and skilled people).

Pre investment counselling

Industrial information dissemination

Scouting for entrepreneurs

Extension services

Entrepreneurship development

Project appraisal (technical, financial, economic and management)

Feasibility study

Credit arrangement

Sanction of enterprises

Supervision of project implementation

Infrastructure development

Management and skill development

Product development

Design and prototype development and distribution

Raw material arrangement

Diagnostic studies

Sub-contracting arrangement

Innovative production process and technology

Quality control

Market survey of products

Marketing (including export) arrangement

Literature on products and process from home and abroad

Research and development

Inter-organization co-ordination.

PROGRAMME (INDICATIVE INVESTMENT OUTLAY)

i)

Impart Entrepreneurship Development Programme (EDP), Total

: 1.00 million
nos.

a) EDP(Management)

: 0.91 million
nos.

b) Skill development(trade-base)

: 0.09 million
nos.

ii)

Total investment outlay

: Tk. 247.5
billion

iii)

Private sector investment on SMCIs (through entrepreneurs equity,

: Tk. 200 billion

NCB, Private Foreign Commercial Banks, Financial Institution and

Leasing Company)
Public sector & private investment (SMCIs sector projects through

: Tk. 47.5 billion

ADP, fund from GOB & Donors participation)

Indicative sector for public & private investment (joint venture GOB and
private participation, NCBs,PCBs and Foreign Commercial Banks)
Booster sector for private investment
Electronics and electrical, software, software development. light engineering, agro-processing
and related business, leather and leather goods, knitwear and readymade garments, plastic and
other synthetics, health care and diagnostics, educational services, pharmaceuticals/cosmetics/
toiletries, fasion rich personal effects, weare and consumption goods.
Public sector programme
Garments Shilpa Park
Active Pharmaceutical Industrial Park
Automobile Estate
Plastic Estate
Leather Industrial Estate
Advanced Technological Support Programme for SMCIs
Universal Salt Iodization Project
Industrial Estate Extension
Poverty Alleviation Programme(through micro-credit in SMCIs).
Special Economic Zone
Engineering & Workshop Estate
Electronic complex (vertical type estate)
Printing and publishing estate
Dry fish processing project.
Human Resources Development Programme at grass root level (skilled and managerial)
Minimize pollution through establishment of treatment plant in the existing and proposed industrial
estate/park
Industrial estate/park for women (vertical or horigental)

Organizational network
BSCICs existing organizational network and structure should be strengthened and recruit more talent new
manpower to carry out BSCICs mandate and vision.
Infact promotional and development activities of BSCIC at present are widely spread out all over the country.
Its organizational network linked with 64 district offices each named Industries Service Centre(ISC), 4
Regional Offices located at main 4 administrative divisions and one headquarter office located in the Capital
City, Dhaka. Altogather consisting of 1400 Govt. approved manpower strength of which different level Senior
Officers 648, Staffs 752 persons constitute BSCIC structure/organogram who are performing BSCICs
functions. Board of Directors is the supreme authority for taking organizational decision. Chairman is the
Chief Executive of the organization and 6 Directors under him are responsible to making policy and to
operate, monitor and controll all of the BSCIC activities and to administer their respective department.
To face globalization challenges and Govt. reform policy presently BSCIC needs rational and effective
manpower structure with smart logistic support containing ICTs and E-governance facilities. By introducing
reform measures BSCIC could take more initiatives for generating its earnings, where cost minimizing
techniques and more income scopes may be introduced. This new era of BSCIC will be reducing GOB
revenue burden and ultimately BSCIC will able to sustain on their long path.
Indicative avenues for earning sources are mentioned in the following :

Commercialization of BSCIC property.

Approxmately 5 percent development charge from plot recepients of industrial estate.

Fees collection from sub-contracting arrangement.

Sales proceeds from market information like market study etc.,

Promotional services, tender documents, forms and other services etc.

Earning from SCITI training services like training fees, consulting services.

Earning from Design Centre by selling Design, Prototype and Expertriate knowledge etc.

To explore more avenues for earnings.

SCITI & Design Centre might have two separate accounts which will earn and meetup their recurring
expenditure.

Definitions:
Small manufacturing industry : Fixed investment less than Tk. 15 million, exclusion of land and factory
building
Small non-manufacturing industry : less than 25 full time employees.
Medium manufacturing enterprise : Fixed investment greater than Tk. 15 million but less than Tk. 100
million.
Medium non-manufacturing enterprise : Less than 100 fulltime employees.
[[
Cottage Industry : Covers household based units operated mainly with family labour.
Definition may be change time to time as declared by the government industrial policy.
Important assumptions :

Skill Human Resources, Optimum supply of power, Fuel, Gas,Desired infrastructure facilities, source and
application of fund remain available.
Conclusion :
Success of SMCIs development in Bangladesh needs several inputs. Such as effective policy modus
operandi upto date knowledge and information related to business and industry, efficient personnel, capital
fund, dependable infrastructures, appropriate and competitive technology and inter-ministerial ties with close
co-ordial relationship is very much needed for achievement of goal and vision of BSCIC. Every input must be
utilized in the proper time in appropriate way so we can expect the efficient output.