The government should bring the informal sector small and medium enterprises under the formal structure so that the firms can get government support, said experts.
They said that of the existing SMEs, 90 per cent was informal and so those were unable to enjoy the government facilities and were facing difficulties in doing business.
Adequate support might strengthen their capacity as backward linkage industries, they said.
Due to the absence of financial literacy among the businesses, they fail to reach the government stimulus support which was allocated by the government for promoting the sector, they said.
They made the suggestion and the observations at a parallel session on leveraging SMEs for vibrant supply chain linkage and productivity spillovers at Bangladesh Business Summit 2023 on Monday.
The Federation of Bangladesh Chambers of Commerce and Industry organised the three-day business summit in March 11-13, marking its 50th founding anniversary at the Bangabandhu International Conference Centre in the capital Dhaka.
SME Foundation managing director Md Mafizur Rahman presented the keynote at the programme.
He said, ‘Cottage, micro, small and medium enterprises’ contribution to the national GDP is about 25 per cent, which will increase by 32 per cent within 2024 while the world average contribution of the SME is 90 per cent.’
The sector is an emerging sector for promoting both economy and employment if the government ensures adequate policy support for the sector, he said.
However, a number of key issues like tendency to be informal and non-compliant hindering the growth of the sector and keep them out of the services from the formal sources, he said.
The institutional, financial and budgetary support might play a vital role in tapping the potentials of the sector for promoting the export basket of the country, he said.
‘Leather goods, handicrafts, agro and food processing, and halal food production have huge potentials on the global market and we can easily capture the demand of the global market,’ he added.
He urged the private sector to come forward to facilitate the small and medium businesses.
Centre for Policy Dialogue research director Khondaker Golam Moazzem suggested forming a long-term combined and coordinated action plan for the growth of the sector.
‘We understand and agree that giving subsidies or cash incentives for SMEs is not a sustainable approach rather focus on creating an ecosystem with a conducive environment where the SMEs either new or existing will get all the support they require at affordable prices,’ he said.
He also said, ‘Big companies can support CMSMEs for sourcing their products.’
Dhaka Chamber of Commerce and Industry president Md Sameer Sattar identified that the shortage of knowledge, transport facilities and adoption of technology the major three obstacles to the development of the sector.
Chittagong Chamber of Commerce president Mahbubul Alam said strengthening the production capacity of CMSMEs by providing policy support like offering tax exemption facilities might play a vital role in meeting both local and export market demand.
Startup Bangladesh Limited managing director Sami Ahmed said, ‘We are forming a combined policy framework for ensuring support for both startup businesses and new small and medium enterprises.’
He said, ‘Freelancers are the future potential for the country, but they are struggling to reach policy supports due to the absence of their proper reorganisation.’
Bangladesh Bank deputy governor Abu Farah Md Nasser said that the central bank had reformed the collateral condition for CMSMEs so that the firms could easily get excess to financial support.
Malaysia high commissioner to Bangladesh Haznah Md Hashim said, ‘SMEs are the key factor of economic growth for any country.’
Bangladesh might follow Malaysia’s footsteps for the development of the domestic SME sector, she said.
SME Foundation chairperson Masudur Rahman chaired the session.
Bangladesh Employer’s Federation president Kamran T Rahman moderated the event.
This NEWS originally published in Dhaka based News Paper The New Age.
