Paying attention to micro-merchants  

Traders dealing in fast-moving consumer goods (FMCG), called micro-merchants in business parlance, have ever remained out of focus in this country. But a study conducted by the United Nations Capital Development Fund has revealed that it is the largest domestic financial transaction and the market is only second to the ready-made garments. What is significant is that about 50,000 such new traders join the band each year and no enterprise boasting assets worth more than Tk 1.0 million excluding land and building. Employing no more than 15 employees and a median income of Tk 90,000 a month, this is undoubtedly a vibrant economic sector. That micro-merchants are doing well is indicative that purchasing power of the people at the grass-roots level too is on the rise. So far 2.0 million people have got involved with the sector and evidently the size of the employment will grow with the new entrants in the business. Clearly, a quiet revolution is taking place rather imperceptibly in terms of business not in the limelight.

The burgeoning financial muscle at the retail level is a good indication of the country's economic health. But then it has its constraints too. A close look at the consumer items listed in the report will discern that those do not speak of wide choices for items required in a robust economy. It is unfortunate that cigarette tops the list of consumer goods. Even betel leaf has occupied its position among the most sold-out items. Also the other items in high demand are some of the most common victuals. In no way do they refer to the rise in people's living standard. When carbohydrate constitutes the major portion of the sold items, it is clear that the nation has miles to go before it attains a desirable living standard.

As for the traders at this retail level, they are not used to digital financial services. With an annual turnover of $ 18.42 billion, its credit market is worth only $778 million. Here is room for streamlining the sector to a large extent. How? Although banking is limited to micro-merchants -only one in 10 of them borrows from banks, it is clear that they are credit-worthy. The commercial banks of the country shun them because they are not adequately conversant with digital financing. But the BRAC bank has found that non-performing loans among this section is almost negligible -less that 3.0 per cent.

In a situation like this, the government should formulate policies for financing such ventures and bring them under a formal financial system. Their turnover points to the fact that here is a potential sector for revenue earning for the government. If the monthly income is in the region of 0.10 million, it is definitely taxable. The recognition of such commercial ventures is however not enough, there is need for diversifying their business. Otherwise, they will discover them at a saturation point soon. Before this happens, the investment should as well take into account productive ventures within a moderate range. Maybe, small and medium enterprises will be an answer to the need.