We have not got anything in the national budget for the fiscal year 2023-24 which can stimulate sustainable growth for our SME sector. Even our business operating cost would go up further in future. However, prudent policy measures can ease the burden on SME businesses and promote its sustainable development, President of National Association of Small and Cottage Industries of Bangladesh (NASCIB) Mirza Nurul Ghani Shovon tells The Business Post’s Rafikul Islam in an exclusive interview
You are going to observe “Micro, Small and Medium-sized Enterprises Day” on June 27 declared by UNGA. What’s your expectation?
The Micro, Small, and Cottage Industries (MSME) sector in Bangladesh has emerged as a vital contributor to the country's economy, providing employment opportunities to 89 per cent of the population in urban and rural areas.
This sector comprises a staggering 7.8 million enterprises, employing approximately 21 million people.
However, the day is observed internationally. We also observe the day. But we have to learn from it. We have to work together to achieve sustainable development goals (SDGs) in due time. Prudent measures are needed to boost the sector.
NASCIB aims to foster the development of self-sustained and profitable micro, small, and cottage industries, ultimately contributing to a prosperous Bangladesh.
The government has unveiled a proposed budget for FY24. What types of facilities would bring it for the SME sector next year?
We have not got anything in the new budget which can help maintain sustainable growth for our sector. We wanted the government to focus on policies and allocations in the budget that can promote the growth and development of small and cottage industries. This includes increased access to affordable credit, simplified regulatory process and incentives for innovation and technology adoption.
Can you shed some light on the current challenges facing small and cottage industries while doing business?
The Cottage, Micro, Small, and Medium Enterprises (CMSMEs) often face challenges such as limited access to financing, access to information, less business environment, minimum forward and backward business linkages, less subcontracting, high inflation, increased prices of raw materials, and rising energy costs.
Bangladesh's CMSME entrepreneurs and products are deprived of various legal, institutional and strategic benefits. On the one hand, just as entrepreneurs do not get enough benefits for product market and quality research, similarly creative and quality product research and market creation do not get strategic, technical or economic benefits. In the way of development, international market creation or IPR (IPR) can be facilitated to make domestic products industrial and efficient market, so it is noteworthy.
Furthermore, bureaucratic tangles and complex regulatory process hinder their growth. Addressing these challenges will require concerted efforts from the government, financial institutions, and industry associations.
What kinds of problems small and cottage industries may face after LDC graduation?
The country’s graduation from LDC status will pose new challenges to CMSMEs in Bangladesh. It is important to approach these obstacles as opportunities for growth and development.
The government in collaboration with industry associations like NASCIB should develop comprehensive strategies that can address the specific needs of CMSMEs.
This includes providing targeted support in terms of capacity building, access to finance, technology adoption, market access facilitation, and skills development. By proactively addressing these challenges, Bangladesh can ensure continued success and resilience of its CMSMEs in the post-graduation era.
What types of structural reforms are necessary to further develop this sector?
Structural reforms are crucial to tap the full potential of small and cottage industries. We need policies that can narrow infrastructure gap, enhance skills development, encourage entrepreneurship and foster market linkages. Additionally, promoting research and development activities and improving access to technology will help our industries become more competitive globally.
You know that the government has formulated SME Policy-2019 and Industry Policy-2022, focusing on the development of CMSMEs. To get maximum outcomes, time-bound action plans need to be implemented effectively with collaborative approaches. If there is any gap, we need to identify these gaps and challenges and make it happen.
Moreover, focusing on sustainable energy solutions and creating export-oriented opportunities will help strengthen our industries and contribute to the country’s economic growth.
NASCIB expects robust policy support from the government to ensure congenial environment for their sustainable growth. In this article, we will highlight key policy support expectations of NASCIB to facilitate the advancement of small and cottage industries in Bangladesh.
