Identifying SMEs as a thrust sector

 Shahiduzzaman Khan | Published:  March 07, 2020 22:14:40

Against the backdrop of the on-going SME Fair 2020 in the city and the
government's renewed interest to help bolster growth and expansion of the
small and medium enterprises (SMEs) sector, the country's industrial progress
should get a shot in the arm.

For further development of the country's SME sector, Prime Minister Sheikh
Hasina put forth a five-point proposal. Inaugurating the 8th National SME
Product Fair 2020 in the capital, the Prime Minister said many of the country's
SME products are world standard and they're also associated with our cultural
heritage. So, we'll have to undertake some measures for developing the SME
sector further, she said.

The nine-day fair at the Krishibid Institution, Bangladesh (KIB) auditorium at

Farmgate in the city is now in progress. In her first proposal, the premier said
the entrepreneurs will have to concentrate more on producing hundred per cent
export-oriented high-end goods side by side our heritage products. Secondly,
the SME entrepreneurs will have to manufacture complementary goods to the
heavy industries. Thirdly, they should pave the way to flourish the Blue
Economy. In the fourth place, she said, the entrepreneurs will have to focus
more on turning Bangladesh into a partner of 'Global Value Chain' using a low
cost of production in combination with modern technology. Fifthly, she said
the country's scientists and researchers will have to give more attention
towards coordination/ hybridisation of three innovative sectors -- digital,
biological and physical -- so that Bangladesh can keep pace with fourth
industrial revolution (4IR).

The prime minister put emphasis on creating more women entrepreneurs,

proper utilisation of marine resources, diversification of the products,
exploring new markets, setting up food processing industries, producing goods
keeping pace with the variation of seasons, generating more employment and
ensuring availability of the raw materials.

She suggested that the youths should start small businesses taking loans
instead of not running after jobs. The Prime Minister said collateral-free loan
is being disbursed from the Karmasangsthan Bank and the SME Foundation to
facilitate entrepreneurs in setting up SMEs.

The prime minister has already given directives to the authorities so that
women entrepreneurs can get special facilities in the economic zones as she
wants males and females to come forward equally. The government wants to
give special attention to bring in more female entrepreneurs in SME
businesses.

Placing emphasis on strengthening connectivity, Sheikh Hasina said smooth

transportation and marketing of products is not possible without it. Keeping
this in mind, the country has taken various measures.

New markets have to be explored alongside creating domestic markets. The

country has to take initiatives for increased market exploration, she said. The
government, she added, has taken steps to build a skilled workforce in the
country as the demand of such manpower is high everywhere.

Some moves are already in place in line with the PM's directions. Importance
has been given to vocational and technical education, and more technical
schools are being set up at upazila level to build such workforce. The SME
Foundation has identified 177 clusters of small and medium industries across
the country and is rendering entrepreneur training and low rate financing.
The government also framed and adopted necessary laws and policies for
further flourishing of the SME sector that among others include reorganising
the Bangladesh Small and Cottage Industries Corporation (BSCIC). The SME
entrepreneurs will be trained in the BSCIC.

The new Industrial Policy has identified SME as a thrust sector. The industries
ministry has set up a SME cell to take up policy and strategies for expansion
of the SME sector. The ministry has also formed a SME panel with
representatives from the private sector to help the government implement  
recommendations of the SME Taskforce.

However, a level-playing field for small businesses is important for the

generating employment and increasing opportunities for women and the poor.
The small business community is often stymied by structural impediments,
including over-regulation, corruption, and other aspects of poor governance,
as well as by high prices caused by providers of inputs and services, often the
state-owned enterprises.

The country's strategy should be to identify impediments to business growth,

followed by support to enhance private sector's ability to engage in policy
dialogues to move forward the reform agenda.

SMEs have been contributing enormously to the economy of Bangladesh.

Thousands of small and cottage industries, set up throughout the country over
the years, are ensuring bread and butter to millions without adequate
government support. Currently, SMEs account for 40 per cent of gross
manufacturing output, 80 per cent of industrial employment and 25 per cent of
total labour force. Small industries under leather sector, in spite of various
odds and difficulties, account for 70 per cent of export earnings of the sector.