We are trying to increase the SME sector’s contribution to the GDP from the current 25 per cent to 36 per cent by 2030 and need Tk 20,000 crore to implement the SME Policy 2019, SME Foundation Acting Managing Director Salahuddin Mahmud tells The Business Post’s Rafikul Islam in an exclusive interview
The UN has designated 27 June as Micro-, Small and Medium-sized Enterprises (MSME) Day to raise awareness of the tremendous contributions of MSMEs to achieving SDGs. What types of programmes will you arrange to mark the day?
The first-ever MSME Day was celebrated on June 27, 2017. We celebrate the day by arranging different discussions, meetings, rallies, and seminars to inform people about SME activities and create awareness among entrepreneurs in the country.
Despite its huge importance, we cannot arrange any programmes this year on the day as we will be on Eid-ul-Azha holiday. But our other scheduled activities will go on as usual in an official manner. The day is very significant.
What is the current status of Bangladesh’s SME sector and its future prospect?
The SME sector’s contribution to Bangladesh’s economy is 25 per cent. A few years back, we set a target to increase this sector’s contribution to 32 per cent by 2024. We hope this figure will go up to 35-36 per cent by 2030.
Besides, this sector’s contribution will stand at 40 per cent by 2040 as our industries would be smart and developed by 2041, as declared by Prime Minister Sheikh Hasina.
In this context, we are trying our best to achieve the target. We are strengthening our capacity building, developing clusters, and arranging training for SMEs. Besides, we are doing research to turn the informal sector into formal so that it can be vibrant for the sake of economic development. Now around 99 industrial units are involved with SMEs.
After completing the research, we can find proper ways of formalisation. The industrially developed countries in the world achieved success through the SME sector. SMEs are a driving force in the economy.
If we can formalise the SME sector, we can assist them easily, arrange training, and develop technologically. Besides, we will get the database of all entrepreneurs, can ensure environmental safety, and improve product quality.
Why is the SME sector’s contribution to GDP much lower in Bangladesh compared to the neighbouring countries? What is the SME Foundation doing to increase this contribution?
The SME sector’s contribution to GDP is more than 60 per cent in India and Vietnam. This figure is over 90 per cent in most of the countries in Europe. Due to the lack of awareness among our entrepreneurs about enhancing their business capacity and competitiveness, our contribution to GDP is comparatively low.
Hence, the government’s assistance is significant. The SME Foundation is doing all the necessary things to make the sector commercially vibrant. We mainly arrange different training programmes in almost all districts on subjects such as entrepreneurship development, financial literacy, export diversification and procedure, and social and online business.
Besides, we help ease the trade documentation process as well as access to finance and market. We also help make quality products at affordable prices.
Many businesses demand separate definitions of CMSME and SME. What is your observation?
Due to combining the Cottage, Micro, Small and Medium Enterprises (CMSMEs) with the SMEs, cottage and micro entrepreneurs are deprived of various facilities. They are also deprived of government funds as they compete with SMEs. Besides, they lag behind in access to finance.
What are the key challenges SME entrepreneurs face nowadays?
Access to finance and products, diversification, product quality, and local and international marketing are the main challenges in this sector.
Do you see any positive things in the FY24 budget that will help boost the SME sector?
The prime minister is very positive about developing this sector to help the economy flourish. We do not see any adverse things in the budget that will hamper the sector’s development. We want a strong and green SME sector in the country and entrepreneurs must be aware of competitiveness.
What are your future plans to achieve SDGs by 2030?
To achieve the goal in due time, we are doing all the necessary things. Six to seven months ago, we wrote a letter to the government demanding Tk 20,000 crore to implement the SME Policy 2019. The matter is now being processed by the finance ministry.
We also want separate budget allocations each year, which will help us bear administration and other costs. All our activities contribute to achieving the Sustainable Development Goals (SDGs) directly and indirectly. We are in a good position to achieve the goal by 2030.
Our initiatives help create lots of women entrepreneurs as well as result in women empowerment and poverty reduction. The SME sector essentially contributes to enhancing the country’s economy.
