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Most of cottage, micro, small and medium entrepreneurs (CMSMEs) are yet to get the benefit of announced stimulus package, experts and stakeholders said on Wednesday.
Existing complex documentation process and lengthy procedures are some of the reasons behind this slow disbursement, they point out.
Moreover, BSCIC, SME Foundation, PKSF etc. may be utilised to reach the stimulus to the rural part of the country, they commented in a webinar arranged by Dhaka Chamber of Commerce & Industry (DCCI) “CMSME’s Access to Finance and the Way forward”.
Abu Farah Md. Naser, Executive Director, Bangladesh Bank joined the webinar as chief guest.
DCCI President Shams Mahmud in his welcome remarks said the Cottage, Micro, Small and Medium Enterprises (CMSME) sector represents 13 million business entities in Bangladesh which constitutes about 35.49 per cent employment in the country.
But the prevailing Covid 19-led crisis affects the sector adversely, he added.
N K A Mobin, FCA, FCS, Senior Vice President, DCCI presented a power point on SME Development Department of DCCI.
He said CMSME sector in the country is contributing 25 per cent of our GDP and 35.5 per cent of total employment.
He also proposed to formulate an action plan to bring the rural CMSMEs into export oriented market.
Abu Farah Md. Naser, Executive Director, Bangladesh Bank said that 20 thousand crore taka stimulus is for 3 year term so that the source of fund can run smoothly. If the stimulus rolls out for three years its effective amount will be 60 thousand taka.
He said, in terms of handling small entrepreneurs risks of loan classification is very low.
Akhil Ranjan Tarafder, General Manager, BSCIC said CMSMEs sometimes struggle to get loan. Only 28 per cent of CMSMEs have access to finance whereas 44 per cent large enterprises have the access to finance.
Nazeem Sattar, General Manager, SME Foundation urges to frame a guideline for small entrepreneurs. SME foundation made such guidelines and submitted to Ministry of industries for approval.
He also urged for creating alternative financing model.
Ferdousi Begum, Joint Secretary, Ministry of Industries said that banks’ willingness is necessary to successfully disbursement of stimulus.
Syed Abdul Momen, Head of SME, BRAC Bank Ltd urges to allow more trading-based entrepreneurs to access to the stimulus. He also requested to slash the cap of interest rate from 9 per cent.
Sanjib Kumar Dey, Head of SME from Mutual Trust Bank said that the package is not fully explored. Mutual Trust Bank has a target of disbursing 3.01 billion taka out of which 40 per cent will be fulfilled by August and by December they will be successful to meet the target.
Anwar Faruque Talukder, EVP, Dutch Bangla Bank Ltd. said demand and supply side constraint is the bottleneck for the market’s revival. They have 340 crore taka disbursement target but he suggested to increase repayment tenure instead of one year.
Sk. Moyeen Uddin, Additional DMD, EXIM Bank said we have many unbanked SME entrepreneurs; but we need to bring them into banking channel. He also stressed on financial literacy of CMSMEs.
Md. Afzal Karim, DMD, Bangladesh Krishi Bank said they have achieved 29 per cent of their target and 945 people got loans from Bangladesh Krishi Bank. Many small entrepreneurs are being deprived of getting required loans due to collateral problem, he told.
Syed M Omar Tayub, Head of MSME, Prime Bank said that to expedite loan disbursement, Bangladesh Bank may allow the banks to give loan from stimulus based on and considering their relationship with the CMSME customers. He also suggested to increase the amount of stimulus so that trading bsector can get maximum advantage.
Mohammad Emtiaz Uddin, EVP, Premier Bank said we need to reach to the rural areas. We get approval of 1.20 billion taka for disbursement, he told.
Kamrul Hasan, Head of SME, One Bank requested Bangladesh Bank to consider increased weight for trading sector.
DCCI Vice President Mohammad Bashiruddin gave the conclu ding remark.