Home ›› 17 Mar 2022 ›› Front
Various issues, such as complicated paperwork, lack of connection with global buyers and the Covid-19 pandemic fallout, are discouraging small and medium enterprises from continuing export-oriented business.
“The sector is not entrepreneur-friendly,” said Esrat Chy, who heads a jute-based enterprise. “There are a lot of difficulties in exporting products.”
According to Bangladesh Bureau of Statistics data, an estimated 78,18,565 SMEs are contributing to the country’s economy. The sector’s contribution to GDP is 25 per cent.
SME entrepreneurs said many documents are required for export while the paperwork process is complicated and time-consuming.
Lack of a one-stop service centre is another issue bogging down the sector. “There isn’t a single place where we can get information and guideline on the required papers. Many entrepreneurs participate in international fairs to build connections with buyers. Taking part in a fair costs around Tk 6-7 lakh, which is a big amount for small entrepreneurs,” she told The Business Post.
Rezbin Begum, owner of Leather Goods Company at BSCIC Dhamrai Industrial City, concurred. “Also, a lack of knowledge about ethnicity standard and poor connection with buyers affect business,” she said.
‘Struggling to survive’
Nazma Khatun, another entrepreneur, said she incurred a Tk 2 crore loss during the pandemic shutdown. “One of my orders from a Malaysian buyer got cancelled. The massive loss forced me to divert my attention to the local market,” she said.
Nazma had taken loans from the government’s stimulus package. With the one-year grace period over, she has to pay instalments every three months. “The loan was not of much help,” she said. “I have to pay back the loan even though I am far from a complete financial recovery. It’s becoming tough to survive.”
Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said the SME sector needs to bridge the gap between entrepreneurs and international buyers. The entrepreneurs lag behind their competitors because of a lack of connection with buyers.
“The sector should be export-oriented,” he said. “BSCIC and SME Foundation with other stakeholders can help create the opportunity to produce global standard products.”
They can work with the Export Promotion Bureau to get stalls at international fairs at a reduced price or free of cost. “India subsidise the CMSMEs to participate in fairs,” he said, suggesting the authorities concerned in Bangladesh do the same.
Earning $250m from North America
Dr Md Mafizur Rahman, Managing Director of SME Foundation, told The Business Post, “We are reducing complications in preparing and getting export documents. We trained entrepreneurs on how they can compete at the global level.”
He said the foundation had taken a project to help at least 100 new entrepreneurs enter the export market every year. “We will groom 100 entrepreneurs under an initiative of the Trade Facilitation Office (TFO) Canada,”
“ After the successful completion of the initiative, we are expecting to earn an estimated $250 million in exports from the North America region within the next three years,” he added.
Rahman said they are working on expanding the export market and reducing the gap between entrepreneurs and buyers.
“We are increasing the number of meetings with embassies and high commissions in Bangladesh. We are giving them a list of our global standard goods so that they can showcase it and buyers can easily communicate with our entrepreneurs,” he said.
According to SME Policy 2019, the contribution of SME sector in the GDP to be increased from 25 % to 32% in order to implement the development projections of the government.
According to BBS, 2,45,00,850 persons are engaged in the SMRE sector.
According to the Planning Division under the Ministry of Planning, SMEs now occupy an important position in the national economy. They account for about 45 percent of manufacturing value addition, about 80 percent of industrial employment, about 90 percent of total industrial units and about 25 percent of the labor force. Their total contribution to export earnings varies from 75 percent to 80 percent.
