Author: Mohammed Sohel, Managing Director, Bangla Poshak limited and Chairman, Standing Committee on SMEs, BGMEA, Director of JBCCI.
The potential of small and medium enterprises (SMEs) is yet to be fully utilised in Bangladesh, although they have the ability to create numerous jobs and increase their contribution to the gross domestic product,
It is important to provide SMEs appropriate policy support to develop the sector and to increase SMEs’ contribution to the country’s GDP.The SMEs are unable to thrive in Bangladesh because of some major challenges like lack of fiscal incentives, management problems, access to finance, policy inconsistency and bureaucracy
Some Challenges and demands for SMEs factories –
- SME factories are facing cash and financing crisis as export goods are taking more time to reach destinations due to the war between Ukraine- Russia.
- SME factories have same bank rate as the large companies/ exporters but SME have more overhead cost. I suggest the bank rate should be different for SME factories.
- SME deals with mid-level customer/buyers who does not offer good prices and at the same time the buyers take advantages of the marketing situation.
- Currently all the factories in Bangladesh have to maintain several compliance certificates and standards and renew them every year. These are same as any other large exporters for whom it is easier to maintain. SMEs after taking all the measures which is also an extra financial burden, do not get the price benefit of it.
- Due to improper supply of electricity and gas, SMEs have to maintain generator which increases expenditure a lot.
- SMEs do not get any extra facilities from NBR, customs. Their non-cooperation increases the time and cost of export.
I suggest, there should be extra facilities and separate policies for RMG SMEs in every sector specially from governments and banks. Otherwise it will be really hard for the small factories to survive.
