The cottage, micro, small and medium enterprises (CMSMEs) need more attention and speedy disbursement of funds from the stimulus packages to ensure their sustainable recovery from the Covid-19 pandemic.

Also, the process will have to be digitised through the formulation of a database.

There is also a need for expanding and making the credit guarantee scheme flexible so that the entrepreneurs can maximize its benefits.

An alternate source or mechanism, apart from the banking system for distributing stimulus funds to the CMSMEs, has to be developed so that the unbanked entrepreneurs could get benefitted.

Stakeholders and experts came up with the observations at the webinar "Impact of Covid-19 on CMSMEs and Understanding their Recovery: Evidence from BSCIC Industrial Estates" organised jointly by Economic Reporters' Forum and PRISM Programme.

ERF President Sharmeen Rinvy chaired the event while General Secretary S M Rashidul Islam moderated it.

Dr Monzur Hossain, the research director of Bangladesh Institute of Development Studies and also a consultant of PRISM, said: "Around 96% number of firms were affected during the lockdown owing to the pandemic while the CMSMEs recovered up to 80% of their production by December last year."

Also read: DCCI for SME act, new definition of CMSMEs

Speaking at the programme, Industries Minister Nurul Majid Mahmud Humayun said, "the CMSMEs were hit hardest during the pandemic and the government had rightly announced a Tk20,000 crore stimulus package for them."

"Another Tk1,500 crore stimulus package has been announced so that the entrepreneurs in the rural areas could get benefitted. Of that, Tk300 crore has been allocated against the SME Foundation which will distribute Tk100 crore in the outgoing fiscal year while Tk200 crore in the next fiscal year (FY22)."

"There is no alternative to expanding the CMSMEs as they are playing an important role in boosting the country's total economic output through increasing export earnings and creating more employment."

Ambassador Rensje Teerink, head of the delegation of the European Union to Bangladesh, said: "It is instrumental to scale, upscale and rescale the workforce of the enterprises in the country to get a better outcome. Comprehensive and unique social protection system should be put in place."

Bangladesh Small and Cottage Industries Corporation (BSCIC) Chairman Md Mostaque Hassan said, "The corporation's online service will be inaugurated on June 13; online marketing will be launched soon. Also, a master plan has been undertaken to ensure export diversification."

Former Bangladesh Bank governor Dr Atiur Rahman said the government will have to think about rolling out the second round of stimulus packages to the affected industries before the first round of the stimulus packages ends. Also, the rules and regulations of the central bank, as well as its credit guarantee scheme, should be more simplified.

Also read: CMSMEs can now take term loan under stimulus package

He suggested providing special stimulus or funds from the budget to the affected enterprises in the districts like Khulna, Satkhira, Natore where lockdown is being enforced to curb the Covid-19 infection.

The former Bangladesh Bank governor also said BSCIC should develop a value chain, put attention on diversification of markets, and sourcing of raw materials.

BUILD Chair Abul Kasem Khan demanded time-bound speedy disbursement of funds.

"Apart from the banking sector, an alternate source or mechanism should be developed for the distribution of the funds so that the unbanked entrepreneurs could get the support. A delayed or deferred payment system can be introduced as the CMSMEs are under pressure with the payments of VAT, tax and utility bills."

He said the formulation of a database for the CMSMEs is very important for better policy design.

Chairman and CEO of Pran-RFL Group Ahsan Khan Chowdhury said BSCIC can create a linkage between the large-scale industries and small industries; however, it should give more attention to the CMSMEs to ensure their revival.

DCCI President Rizwan Rahman proposed providing 50% of the government stimulus package to the micro, cottage and small industries, withdrawing tax on Facebook ads to spur the growth of the e-commerce market, digitisation of SMEs, and providing fiscal literacy training to the bankers.