Commerce Minister Tipu Munshi has said Bangladesh is an agro-based economy so both businesses and government need to give emphasis on this sector including product diversification. Moreover, “we need to strengthen our SMEs for better expansion of our economy,” he said. Tipu Munshi came up with the remarks while addressing as the chief guest at the inaugural ceremony of the new extended office space of Dhaka Chamber of Commerce & Industry (DCCI) namely “DCCI Gulshan Centre” on Saturday. The Commerce Minister also emphasized to work more to do better in all business indices to be competitive in the international market. He said that the new extension of DCCI (DCCI Gulshan Centre) in the north side of the city is a reflection of its strength and he hoped that DCCI will be able to serve the business community more in the days to come. Read: Commodity prices to come down in line with global market rate: Tipu Munshi Jaim Uddin, president of Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) said Bangladesh still lags behind in the logistic sector, but it is necessary to prioritize the logistic sector to attract foreign direct investment (FDI). He said that removing traffic congestion in the Dhaka-Chittagong highway and ensuring faster services at the sea ports will help boost the economy.

Business loans provide entrepreneurs and startup founders the much-needed capital for expanding their operations. But lower cost of borrowing is what matters the most to them. To spruce up credit demand and encourage more women to begin their own venture, Bangladesh Bank (BB) is now wooing the female entrepreneurs of the country with lower interest rates. As the biggest step, the central bank has reduced the interest rate from 7 to 5% in line with its ambitious target of disbursing at least 15% of the loan amount earmarked for the small and medium-sized enterprises (SMEs) to women entrepreneurs by 2024. Read Some Inspiring Women Entrepreneurs in Bangladesh in Diverse Sectors At the same time, the central bank has reduced the interest rate from 3 to 0.5% at the institutional level as an incentive to banks and financial institutions for providing loans to women entrepreneurs.

Speakers at a webinar on Thursday called for focusing support to SMEs, particularly women entrepreneurs,  as they are struggling to survive. Women-led enterprises in Bangladesh have long faced policy hurdles in accessing finance from formal channels. Financial institutions are also reluctant to provide loans to women entrepreneurs, including under government announced stimulus packages, they said. Just 5.6 percent of recipients of the government- announced Tk 200 billion stimulus package for the small- to medium-sized enterprises (SME) are women, and they are mostly urban-based, they added. Amid all the challenges faced by female entrepreneurs, the topic of gender inclusion has gained momentum among the investor circle. Read: BGMEA seeks Russian support for RMG exports Apart from providing capital to women entrepreneurs, it is also essential to acknowledge that additional support to build women networks and create opportunities for women to rise to leadership positions through organizational policies are also essential tools to promote women’s economic participation. The SME sector contributes 20-25 percent to Bangladesh’s GDP. If female entrepreneurs get necessary support, then the sector’s contribution to GDP would increase, they observed.  Addressing in the webinar titled ‘Gender inclusion through investing’, they insisted on improving women’s access to finance and to adopt a gender-lens approach throughout the investment lifecycle, including the origination and selection process. A panel of investors, entrepreneurs, lawyers and intermediaries joined the discussion to share their unique experiences and perspectives for the audiences to better understand how impact can be amplified to improve gender inclusion through investments. Sylvana Q. Sinha, Founder, Chair, & CEO at Praava Health; Anita Ghazi Rahman, Founder and Managing Partner at The Legal Circle; and Bijon Islam, Co-Founder and CEO at LightCastle Partners; discussed about the potential of gender inclusion through impact investing in Bangladesh. Nirjhor Rahman, CEO of Bangladesh Angels, shared the latest update from the Bangladesh Women Angels Network chapter, which is going to be launched soon. Read: Investment proposals grow 46.33 pc in July-September 2021: BIDA The session was moderated by Maxime Cheng, Lead Market and Capacity Building Program at Roots of Impact. B-Briddhi is a multi-year partnership between the Embassy of Switzerland in Bangladesh, Roots of Impact, LightCastle Partners, and other stakeholders including investors, private sector organisations, incubators, and support organisations for impact enterprises.  

Speakers in a workshop on Sunday emphasized the need for extending the stimulus loan repayment schedule and relaxing the existing conditions to accelerate the disbursement of loans in the SME sector.  They also laid emphasis on a transparent policy ensuring inclusiveness and transparent policy response so that SMEs and women-led enterprises can tackle the Covid-induced challenges. Read: Stimulus loan for CMSMEs: Disbursement may miss Dec deadline They said the pandemic shock is still there in the business, and the price hike of raw materials has created a problem for the small enterprises to grow as the product price at the consumer level is not increasing.  The workshop, held at a city hotel, focused on 'Covid-induced stimulus packages for SME's and women-led enterprises exploring research policy interlaces.  Local Government, Rural Development and Cooperatives Minister Tazul Islam said the government always appreciates research work and innovations for financial inclusion.  The government is implementing various stimulus packages with a special focus on the CMSME sector so that it can rebound soon, he said. Read: 50 years of Bangladesh: FICCI to unveil 3 growth drivers on FDI  CPD research director Dr Khondaker Golam Moazzem presented the keynote paper on the topic.  Swedish Ambassador to Bangladesh Alexandra Berg Von Linde said Bangladesh women entrepreneurs are doing well and their country will continue to support them.  Kazi Nabil Ahmed, member of the parliamentary standing committee on Finance Ministry, was present at the programme moderated by CPD Executive Director Dr Fahmida Khatun.    

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Good Fashion Fund (GFF) have joined hands to collaborate in taking the apparel and textile industry of Bangladesh a step ahead in the area of environmental sustainability by financing sustainable practices and technologies. BGMEA and GFF signed a Memorandum of Understanding (MoU) recently to support and strengthen the development and uptake of innovative sustainability solutions and particularly to improve environmental and social sustainability within factories in Bangladesh. BGMEA President Faruque Hassan and GFF Fund Director Bob Assenberg signed the MoU at a virtual ceremony on behalf of their respective organizations. BGMEA Directors Barrister Shehrin Salam Oishee and Md. Mohiuddin Rubel were also present at the agreement signing ceremony. As per agreement, Good Fashion Fund will provide long term loan in addition to technical and environmental and social expertise to the manufacturers to adopt sustainable production. Good Fashion Fund (www.goodfashionfund.com) launched in 2019 is initiated by Laudes Foundation and Fashion for Good and managed by Fund Manger FOUNT. READ: BGMEA extends financial aid for ailing photographer Chanchal Mahmood  

Commerce Minister Tipu Munshi has said that the online sales of sacrificial animals could touch 7 lakh this year, with more and more people preferring the virtual way of buying amid Covid-19. “I think the sales of animals could touch 5-7 lakh this year. Last year, the figure was about 1 lakh," he said at a webinar on the 'Impact of E-commerce on SMEs' held in Dhaka on Thursday. On the virtual promotion of products manufactured by the small and medium enterprises (SMEs), Tipu said his ministry has been working to help them.  Also read: Digital Haat and more Qurbani Cow online shops targeting Eid-ul-Azha in Bangladesh “But cooperation from all stakeholders are required to achieve success in this regard. We all have to move forward together," he said.  The virtual seminar, organised by Better Bangladesh Foundation (BBF), was also addressed by director (news) of Channel-i Shykh Seraj, Chairman of SME Foundation Prof Masudur Rahman, BBF chairman Prof Masud A Khan, director general of WTO Cell of Commerce Ministry Hafizur Rahman, General Secretary of E-Commerce Association of Bangladesh Abdul Wahed Tamal, and Director of Walton Group Sabina Jarin Orona. Sharing his own experience of buying a cow through an online platform during Eid last year, Tipu said that initially there were some problems with the virtual trading process. "But they have been resolved in consultation with Bangladesh Bank." Also read: 27,000 sacrificial animals sold online ahead of Eid On his part, Shykh Seraj spoke about the huge scope for e-commerce in the country. "But there is a need for an umbrella body to bring all the SMEs under it, especially the rural producers and traders. This would help them tap the potential that e-commerce has in Bangladesh." "SME Foundation, ICT Ministry and Commerce Ministry can play a vital role in this regard," he added. Hafizur Rahman, however,  rued the lack of mechanism in the country to promote many SMEs producing "lost products" through financial inclusion. Abdul Wahed said that ECB has 1,600 members connected to 12,000 SMEs. "But most of these SMEs are from urban areas.  Also read: SMEs are lifeline to country's economy: Tipu Munshi   Initiatives are required to promote the rural SMEs as well so as to involve them in the virtual sales platforms," he said. 

To boost export growth and help the economy rebound from the COVID 19 pandemic impacts, improving the manufacturing sector’s productivity will be crucial for Bangladesh, says a new World Bank report launched today. The report, ‘Gearing up for the Future of Manufacturing in Bangladesh’ suggests that by strengthening innovation and technology adoption in firms, the manufacturing sector can improve productivity. For this, the report identified three pillars: capabilities of managers and workers, connectivity to international markets, and complementary markets and institutions. Read:Helping poor in Bangladesh: WB approves $600 mn for 2 projects Adopting new technologies and business practices will also help firms recover faster from the COVID-19 crisis. “Bangladesh’s success in readymade garments (RMG) export has created about four million jobs and driven economic growth. But, in recent years, job creation in the RMG sector slowed due to automation and the trend will likely accelerate in the post pandemic world,” World Bank Country Director for Bangladesh and Bhutan Mercy Tembon said. “This creates the urgent need for Bangladeshi manufacturers to shift gears from competing on low labor-intensive productivity to competing on higher productivity. For this to happen, firms will need to adopt better technologies across business functions and production processes.” The report finds that in Bangladesh, most firms still use basic or near-basic technologies. For example, more than 40 percent of firms still use handwritten documents for business administration, while three-fourth of them practice manual quality inspections. Managerial and technical capabilities are crucial for a turnaround. About half of the manufacturing firms are run by people without college degrees. Read: 3 legal luminaries appointed from Bangladesh to WB's arbitration court Compared to these firms, those with college-educated managers have a 10 percent higher level of technology. Hence, building human capital remains an important agenda, as well as enabling firms to. access advisory services in cost-effective ways. International connectivity also contributes to the spread of technology. Firms doing business with multinational companies use more advanced technology than those working only in the local market. Export diversification beyond the readymade garments (RMG) sector will be crucial. Reducing restrictions on international trade and Foreign Direct Investment, making the duty-free import of raw materials more accessible to firms outside the RMG sector and modernizing special economic zones will help diversify export-led growth. Strong financial institutions and regulatory frameworks underpin the importance of complementary markets for technology adoption. About half of the surveyed small and medium enterprises (SMEs) identified a lack of financing as the main barrier to adopting technology. Read:Govt, WB ink $250 mn deal to help Bangladesh create more jobs To help firms to borrow for their technology needs easily, a stronger financial sector will be needed. Continuing with regulatory reforms to reduce the cost of doing business too remains vital. “Creating more and better jobs is a development priority for Bangladesh. An export-led manufacturing sector can create sustainable and better-paying jobs by adopting better technologies,” said Siddharth Sharma, World Bank Senior Economist and a co-author of the report. “As Bangladesh seeks to diversify its export base, move up the value chain, and create better-paying jobs, improving the productivity of firms remains central to preparing for the future of manufacturing.”

Hit hard again, this time by the second wave of the Covid-19 pandemic, Bangladesh's small and medium enterprises (SMEs) are now pinning hopes on the upcoming budget to stay afloat. Not to mention that the survival of these firms is important as they are one of the major employers in the country's economy. Ranging from short-term liquidity and tax cuts to simple compliance for availing loans and extension of debt repayment periods by at least two years, these enterprises seek an array of relief from the government to tide over the economic crisis. These leeways to SMEs, entrepreneurs say, will not only help the sector survive but also ensure the preservation of jobs. Read Speakers urge for simplifying process of stimulus fund disbursement to SMEs Kazi Sazedur Rahman, the president of Paper Cup Manufacturers' Association of Bangladesh (PCMAB), told UNB that though a slew of stimulus packages was announced by the government last year, over 80 percent of the small entrepreneurs in Bangladesh failed to reap the benefits of the same due to corruption in the system. “Though Bangladesh Bank said that over 72 percent of the stimulus packages worth Tk20,000 crore were disbursed as loans until March 31, the reality is different. Some 95 percent of the disbursed loans were availed by corporate houses through sister concerns floated overnight," said Sazedur, also the MD of KPC Industry. According to him, the SME sector has again been hit hard by the second wave of Covid. "The government has so far been very supportive of the sector, but the problem lies at the loan distribution level. Many SMEs are already out of the banking system. If more help is not extended to the sector in the coming fiscal, then many more SMEs will disappear." Also read: Central bank to support SMEs build resilience The small entrepreneurs also seek a substantial cut in the value-added tax on various items in the upcoming budget -- from the existing 15 percent to 5 percent. "Lower taxation will, in turn, benefit the economy as many SMEs don't acquire trade licenses to avoid paying 15% VAT. So, a cut in VAT will benefit both the government as well as the SMEs," Sazedur said. "Moreover, the central bank should immediately impose a moratorium on old loan repayments as it has already extended the deadline till June 30 for banks to disburse stimulus funds among businesses in the cottage, micro, small and medium enterprise (CMSME) sector. Otherwise, many defaulting entrepreneurs won't get the benefit." Read Raise threshold for financial reporting of SMEs: DCCI

Industries hit hard due to the onslaught of the pandemic are all set to benefit from a $30 million World Bank loan to Bangladesh's BRAC Bank. The loan from the International Finance Corporation, a member of the World Bank Group, will help both the small and medium-sized enterprises (SMEs) as well as large corporations in Bangladesh stay afloat amid the Covid-induced economic slowdown. The investment will help to keep businesses open and preserve jobs, which is critical to sustaining the Bangladeshi economy, according to a release. Also read: IFC supporting SMEs during pandemic The package is, in fact, part of IFC's $8 billion global Covid-19 fast-track financing facility to support companies during the ongoing public health crisis. This new investment comes under the Working Capital Solutions (WCS) programme of the Covid-19 response envelope, which is providing $2 billion globally to emerging-market banks, enabling them to support struggling firms. This project will also be supported by the International Development Association’s Private Sector Window Blended Finance Facility, which is also supporting IFC’s WCS programme with a first-loss guarantee of up to $215 million in eligible countries. With the financing, BRAC Bank is expected to extend loans to its SME and corporate customers, supporting businesses that are now coping with a new wave of Covid-19 in Bangladesh.  “BRAC Bank promotes businesses of all sizes but as the pioneer of SME banking, we are particularly conscious of the needs of SMEs and micro-enterprises that play a vital role in driving economic growth and employment-generation,” said Selim RF Hussain, Managing Director and CEO of BRAC Bank. “The Covid scenario is challenging and at the same time difficult for both banks and their SME and corporate customers. We hope that the partnership with IFC would help us to continue supporting the Covid-impacted businesses and help them recover.” Also read: MSMEs, farmers to benefit from IFC Covid-19 support SMEs make up over 90 percent of businesses in Bangladesh and employ over 20 percent of the adult population. Their cash flows have been heavily disrupted by the ongoing pandemic. An IFC survey last October showed nearly a third of workers in Bangladesh’s micro, small and medium sized enterprises were jobless at the time, due to the Covid-induced financial downturn. “Clearly, the impacts of Covid-19 are continuing to exact a heavy toll on businesses trying to keep operating and keep staff employed,” said Wendy Werner, IFC Country Manager for Bangladesh, Bhutan and Nepal. “This finance line to our long-standing partner, BRAC Bank, is the most recent part of IFC’s effort to help Bangladesh build back better from the Covid-19 pandemic.” In Bangladesh, IFC has provided a total of $260 million in working capital solutions to banks and liquidity support to companies since the beginning of the Covid-19 crisis, including this new funding to BRAC Bank.

Bangladesh Bank will provide a total of Tk 60,000 crore financing to Small and Medium Enterprises (SMEs) by 2023 to ensure economic resilience that will enhance GDP, employment, and inclusive development. Deputy Governor of the central bank Abu Farah Md Naser said this at the Virtual Dialogue titled “Creating Resilient Recovery for Businesses through Enhancing Investment Opportunities: A Case of Southwest Bangladesh.” Business Initiative Leading Development (BUILD) with support from the PROKAS program of the British Council organized the dialogue. As the Chief Guest of the programme, Md Naser also said the Bank has taken the initiative to extend the timeline of the current stimulus package by 2023. “Some Tk2,000 crore collateral-free loan opportunity for SMEs made available under the credit guarantee scheme should be utilized as much as possible,” he added. He held the example of City Bank’s Leno financing model that uses digital technology to process loan applications in the shortest possible time and encouraged other banks to follow the example. For banks operating in grassroots level, he encouraged digital technology to ensure that loan evaluation and processing can be managed in the shortest possible time. Also read: DCCI for SME act, new definition of CMSMEs Md Naser thanked BUILD for organizing the meeting to address the concerns of cottage, micro, and small enterprises from remote regions. “The central bank is also facilitating expansion of aggregate demand by nurturing Bank-MFI linkages that has a base of three crore people across the country,” he added. During the discussion, the Mayor of the Mongla Municipality of the Bagerhat District Sk Abdur Rahman, mentioned that the neediest section of the population: the cottage enterprises, fishermen and the working class have largely missed the benefits of the package. He suggested that banks should provide not only credit but also technical support to ensure that the credit is properly utilized for repayment. “Training and capacity building provided by the government at the local level should be scaled up,” he encouraged speedy completion of the Mongla airport to ensure accelerated investment and development in the region. BUILD Chairperson Abul Kasem Khan noted that the COVID-19 has affected business all around the country, especially the MSMEs. The timely initiatives by the Prime Minister and the government to prepare the country to tackle the health challenges as well as economic effects of the pandemic combined with the all-out action by the Bangladesh Bank and other government agencies were instrumental in protecting the country from the worst consequences. Also read: CMSMEs can now take term loan under stimulus package “Aside from supply side interventions, there also need to be demand side initiatives so that the income and consumption of the ordinary people can be boosted to reinject dynamism in the economy.,” he added. He requested for social safety bond for the small entrepreneurs and some tax changes in the Tax policy and extend tax incentives so that large scale industries can also sustained. BUILD’s CEO Ferdaus Ara Begum informed in reply to a point raised by BB that BUILD is working closely with the Ministry of Industries to get the definition of cottage, micro, small and medium enterprises to ensure that smaller and vulnerable businesses receive more policy priority and support. “As BUILD continues to engage in research and facilitation of the businesses in Mongla and Bagerhat the support from the central bank will be essential,” she also added. In the keynote presentation, Md. Tahmid Zami, Additional Research Director of BUILD noted that in the local BSCIC Industrial Estate of Mongla, around 50% businesses are out of operation and only 20% workers are retained in many factories. “The coconut oil mills, rice mills, small traders, and many other sectors have faced tremendous shock due to the COVID-19. Finance should be distributed to the cottage, micro and small enterprises without stringent requirements for rescuing the endangered businesses,´ Tahmid added. He referred the e-survey in the form of a KPI conducted by BUILD during February-March, 2021 covering chamber representatives, local Government and BSCIC, Bank officials and Businesses. Also read: SMEs are lifeline to country's economy: Tipu Munshi Husne Ara Shikha, General Manager of SME and Special Credits Department informed about 6% of total money disbursed for SME have gone of Southwest region, in case of women, in number it is about 5.43% of the total and noted that there are both positive signs and mixed results in distributing credit to SMEs in the region. Syed Abdul Momen, Head of SMEs of BRAC Bank mentioned that the definition of SMEs should be modified to target the cottage, micro and smaller enterprises more effectively. The decentralized credit management of BRAC and the agent banking sets a good example for the banking industry of the country for meeting the needs of the businesses in the rural level. S Humayun Kabir, Vice President of Bangladesh Frozen Foods Exporters Association requested for a proper insurance policy for the shrimp industry as well as higher incentives such as cash subsidy to ensure better development of the high-potential sector. Cold storage facility for the shrimp and fish sectors should be boosted. He further suggested to consider the sector as agro-based sector while extending support facilities. In case of getting finance Banks and FI request for higher collateral considering uncertainty of the production. Md. Mofidul Islam Tutul, Director of Khulna Chamber of Commerce and Industry stressed on the prospects of the jute sector.