The Financial Express

Small, medium entrepreneurs can raise funds from stock market

| Updated: September 08, 2021 16:05:31

Small, medium entrepreneurs can raise funds from stock market

The Small and Medium Enterprise Foundation (SMEF) and the Dhaka Stock Exchange (DSE) signed a memorandum of understanding (MoU) on Monday under which the latter will help small entrepreneurs raise funds from the capital market.

Entrepreneurs of the country's small and medium enterprises (SMEs) will be able to raise capital, ranging from Tk 5.0 million to Tk 300 million, from the stock market, following the Bangladesh Securities and Exchange Commission (Qualified Investor Offer by Small Capital Companies) Rules 2018.

SMEF managing director (MD) Mafizur Rahman and DSE MD Tarique Amin Bhuiyan inked the MoU at a ceremony, held at DSE Tower in the city's Khilkhet area, said a statement - issued by the SMEF.

SMEF chairperson Prof Masudur Rahman attended the function as the chief guest, while DSE chairman Md Eunusur Rahman presided over the ceremony.

As per the agreement, both the organisations will collaborate with each other to promote SMEs through different programmes.

Speaking on the occasion, the SMEF chairperson said SMEs contribute 60 per cent to the economy of India, and 70 per cent in both China and Japan, whereas the rate is only 25 per cent in Bangladesh.

The foundation is now trying to raise SMEs' contribution through a wide range of programmes, he noted.

"Fund crisis is one of the major challenges for the country's SMEs."

Though the country's banks provide them with Tk 1.8 trillion loans every year, the actualdemand is at least three times higher or Tk 5.4 trillion.

In an effort to address such challenge, the Bangladesh Securities and Exchange Commission (BSEC) has prepared rules to allow SMEs raise capital from the stock market, he added.

The DSE chairman said most of the SMEs could not avail the stimulus packages, declared by the government, due to various complications.

"In such a circumstance, the scope to raise capital from the stock market is a great opportunity for them."

Terming the stock market as the most reliable source of long-term funding, he urged the entrepreneurs to approach the capital market instead of visiting banks.

The SMEF MD said the initiative would set a new benchmark in development of the SME sector in the country.

He, however, opined: "Signing the MoU is not enough. Rather, it should be implemented accordingly."

The DSE statement also said the bourse launched the DSE SME platform in April 2019 to create scopes of funding for the SMEs. The SMEs, affiliated with the platform, will be able to raise capital by getting listed with the stock market.

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