The Financial Express

Encouraging SME entrepreneurs from rural agro-economy 

Syed Mahbubur Rashid   | Published: October 24, 2018 21:51:24 | Updated: October 29, 2018 21:22:24

Encouraging SME entrepreneurs from rural agro-economy 

In a recent interview with The Financial Express, an Adviser to Premier Bank Limited has expressed the hope that the private sector bank will be an SME (small and medium enterprises)-driven bank by 2020. Highlighting various achievements, he explicitly said, "Our focus earlier was on big ventures and large-scale investments. At present, we are concentrating on SME and agriculture loans. Small and medium level entrepreneurs are now getting priority in loan deposit, collection and other banking facilities".

The above comment and intention have come at a time when most of the commercial banks are engaged in dealing with the big clients. Reasons are crystal clear. A large chunk of loan has been sanctioned and is still being sanctioned for the mutual benefits of the issuers and the recipients. The purpose of the loan is immaterial, because this loan is never intended to be recollected. The ultimate aim is to mutually misappropriate the money.

Since the state-owned commercial banks were alone in the field after the War of Independence, millions of taka have been looted by the marauders masquerading as the government-nominated Directors and/or CBA leaders. Some of the privately-owned commercial banks have also joined the race. Inactions and painful indifference of Bangladesh Bank as regulator have only aggravated the situation. Disastrous situation has been prevailing in the banking sector with full of mega defaulter stories. Let us hope that the Premier Bank will be able to keep itself off from the quagmire of loan defaulters.

A few months back, the International Food Policy Research Institute Report (IFPRI) launched the Global Policy Report 2018 at a city hotel in Dhaka. It has been observed that although high-value non-rice crops like onions, vegetables, chilies and cut-flowers are highly profitable, 52 per cent of Bangladesh farmers grow only rice as the price of non-rice crops falls whenever production increases slightly. Here lies the billion dollar question. It has been observed and reported in the media that the farmers have bemoaned and destroyed products like potato or tomato when there were not getting enough buyers preceded by bumper production of the same.

Proper preservation, storage, transportation and marketing problems are acute. Improper preservation or storage may be catastrophic for these products. On the other hand, preservation of rice is very simple. No attention has been paid to these problems. No financial assistance has been given to the growers of these crops. Loan facilities are always urban-oriented. An investor buying shares based on agreement can get the sympathy of the government in case of incurring loss. The government comes forward with the loan facilities for the investors. This is highly unethical. But the government does never open its mouth when growers of potato or tomato incur heavy loss.

Agriculture is the most noble and sincere profession where there is no trick or any kind of cheating.  Agro products contribute to GDP (gross domestic product) growth. The government claims that there are several thousand rural bank branches. But it's a big hoax. These branches hardly come forward to help the farmers. A few years back, the mandarins of the Agriculture Ministry raised hiccup and asked farmers to cultivate strawberry - particularly in the northern part of the country - with the promise of bank loan. It was told that the banks, particularly the state-owned ones, have been advised to liberally grant loan. But the response from the bank was very poor.

Against this backdrop, the objectives as declared by the Premier Bank seems to be very optimistic and praiseworthy. For inclusive growth of the agriculture sector, Premier Bank people can look for SME entrepreneurs from rural areas who will work for growth of non-common and nontraditional agriculture products. In this connection, it may be mentioned that the urban-rural divide has been lessened as far as the issue of inaccessibility is concerned. In 1972, there were 566 kilometres of feeder roads. In 2018, the same stands at 13,242 km.

Actually, almost all upazila and union headquarters are connected with feeder road that are obviously pucca. So, the myth of inaccessibility is virtually gone. In the report of IFPRI, there is the mention of another thing for which we may feel proud of. The report said Bangladesh is the most favoured part in South and East Asia, and the Pacific countries for agricultural technology adoption. The country's 76 per cent area is suitable for agriculture, while it is 35 per cent for India and 10 per cent for China. The IFPRI research report has suggested formulating policies to encourage private investment in export-oriented and international-standard food processing industries, and facilitating export of vegetables fruits and cut-flower. It is believed that the sector will receive private investment if duly responded by the banks and other financial institutions.



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