Call for structural reforms for easy loan process for CMSMEs

Speakers at a webinar have called for structural reforms to enable easy loan disbursement process, establishing a specialised SME Bank and comprehensive SME database for the sake of cottage, micro, small, and medium-sized enterprises (CMSMEs).

The speakers made the call at the virtual meeting titled “Procedures of availing loan from SME stimulus package” organised by Dhaka Chamber of Commerce & Industry (DCCI) and SME Foundation on Tuesday.

Addressing the webinar, DCCI President Rizwan Rahman said that contribution of CMSME to the GDP is only 25 per cent whereas it is 35-60 per cent in the Philippines, Vietnam, Sri Lanka and China.

“Overall income from the CMSME sector reduced to 66 per cent in 2020 in compared to 2019 and 76 per cent of their products remained unsold. According to a DCCI study, it was found that due to pandemic, 62 per cent CMSMEs have to cut their manpower and 90 per cent are continuing their businesses with less capacity. At the same time, 73 per cent of the stimulus packages have been distributed but most of the CMSMEs are still deprived of that fund,” he added.

He also said that medium enterprises have good relation with banks compared to small entrepreneurs because of a lack of documentation and confidence. A CMSME-friendly fund and easy access to a loan management system is the demand of time now.

“If Bangladesh Bank can provide a guideline for the banks that they have to disburse a specific loan amount to the CMSMEs, then banks will have to comply with it,” he added.  

SME Foundation Chairperson Professor Dr Md Masudur Rahman said SMEs are the lifeline of the country’s economy. According to the data of 2013, the number of SMEs in the country stood at 78 lakh but at present, it has exceded 1 crore.

“SME entrepreneur’s capacity building is more important for financial inclusion. We need more training on financial literacy. There are many entrepreneurs outside Dhaka. We need to reform the ease of doing business segments as early as possible. However, chambers should work for capacity building of SMEs,” he added.

SME Foundation Managing Director Dr Md Mafizur Rahman said, “We have disbursed about Tk 122 crore within one and half months to SMEs. We need to set up a specialised SME bank. Tk 200 crore is not enough for the rest of the SMEs but we will complete disbursement of this fund by December 31 this year,” he added.

He also added that the return rates of small entrepreneurs are quite satisfactory.

“But, we need to ensure easy access to loans. We requested all banks to give their 50 per cent loan to the women entrepreneurs,” he said.

The head of SME at IDLC Finance Limited Saifuddowla Shamim said there are more than 80 lakh SME entrepreneurs in Bangladesh.

Urging financial literacy for the CMSME sector, he said, “We have already trained 700 women entrepreneurs. We should give priority the entrepreneurs,” he added. 

SME Foundation Assistant General Manager Suman Chandra Saha presented the keynote paper while DCCI Senior Vice President NKA Mobin, its Director Rashedul Karim Munna and Khairul Majid Mahmud also spoke there.