‘SMEs in India, Thailand, Malaysia received more incentives than Bangladeshi peers’

The government has allocated less incentive than India, Thailand, and Malaysia in the Small and Medium Enterprises (SMEs) sector to help them overcome the losses caused by the Covid-19 pandemic, according to a report of SME Foundation revealed today.

The report styled "The Future of SMEs after the Corona Crisis: Challenges and Opportunities" was disclosed today at a webinar jointly organised by SME Foundation and Friedrich-Ebert-Stiftung, Bangladesh.

It said India allocates 38 per cent of the total incentive package for the SME sector, Thailand 33 per cent and Malaysia 24 per cent, while Bangladesh's allocation is only 22 per cent.

The discussants suggested that the government should increase the incentives for the SME sector and pay special attention for it.

"The revenue of small and medium enterprises has fallen by 66 per cent due to coronavirus crisis, 76 per cent of products remain unsold. 42 per cent of the employees in the sector have received partial salaries, 4 per cent have not been paid," said Atiur Rahman, former governor of Bangladesh Bank, while unveiling the report.

He suggested that at least Tk 20,000 crore more be allocated for the sector to overcome the loss of the SME sector in such a situation.

Rahman pointed out the major challenges for SME growth is less than one-third of the workforce engaged are women, half of the enterprises are located around the two cities, Lack of pre-determined access to government procurement for SMEs and Lack of access to formal finance due to high lending rate, strict requirements.

"SME or small and medium sector is the driving force of Bangladesh's economy. The sector has been severely affected by covid-19. The government is already working with the SME sector seriously to overcome this loss," said Zakia Sultana, secretary to the Ministry of Industries.

"The capacity of The SME Foundation needs to be increased for the development of the SME sector. At the same time, structural and policy reforms need to be carried out for the development of the SME sector," said Md Masudur Rahman, chairperson of SME Foundation.

Md Mafizur Rahman, managing director of SME Foundation, said the SME sector contributes 25 per cent to the GDP and employs almost 8 million people.