Cottage, micro, small and medium enterprises (CMSMEs) must be registered with the Bangladesh Small and Cottage Industry Corporation (BSCIC) to conduct business in the country, and the rule is applicable to companies situated both inside and outside of industrial zones.
This move is part of a provision under the recently formulated Bangladesh Small and Cottage Industries Corporation Act 2023. Under this law, a new regulation will be formulated to facilitate the registration process for CMSMEs, and then the registration process will begin.
Every CMSME establishment situated at BSCIC industrial park will have to register with the corporation as per regulation, the act mentions, adding that even if someone plans to establish such companies outside BSCIC zones, they too will have to register with the corporation .
The corporation will cancel its licence if any establishment fails to materialise within one year of its BCSIS registration.
It should be noted that a lion’s share of the CMSMEs have no registration, and they are conducting business with just a trade licence.
Some of these establishments are operating as public or private limited companies and registered partnership firms after registering with the Office of the Registrar of Joint Stock Companies and Firms.
Similar to other nations in Asia, it is necessary for CMSMEs in Bangladesh to avail licence, financing, and business development facilities under one designated entity. Besides, the country needs separate policies for cottage, micro and small industries, and medium industries.
Experts had made the observation at an event titled “National and policy dialogue with stakeholders to discuss development priority of the SME sector in Bangladesh,” held on September 3.
A keynote presented at the programme states that most countries in Asia have designated entities for overseeing the development of CMSMEs, but as Bangladesh has multiple such entities, entrepreneurs are not getting necessary services due to a lack of coordination.
It also recommends a one-stop SME help desk for facilitating registration, payment of approval tax, business development services, financing, handover of technology, marketing and other key services.
For SME clusters with potential, experts spoke in favour of establishing a common centre for providing quality control, waste management and other services, and a separate CMSME Export Development Corporation.
According to the act, BSCIC will have the authority to permit banking activities inside the industrial park, but only after securing clearance from the Bangladesh Bank.
The corporation will also be able to offer special financial incentives and other benefits to CMSMEs situated inside or outside the industrial park, similar to the economic zones.
The act emphasises the importance of establishing new industries in BSCIC industrial park plots, and maintaining discipline in the CMSME sector.
Anyone found providing misinformation to secure loans from BSCIC, and caught reselling to renting BSCIC plots will face imprisonment and/or fines. A perpetrator will get a maximum two years of imprisonment, and/or Tk 50,000 fine for such irregularities.
Moreover, a perpetrator will face six months of imprisonment and/or Tk 1 lakh fine for damaging or replacing the boundary wall. The penalty will be the same for disrupting the work of BSCIC appointed developers or contractors.
A person will face a maximum one year of imprisonment and/or Tk 50,000 for illegally handing over his/her BSCIC allocated plot. The corporation will take necessary steps to boost the number of female entrepreneurs in the industrial sector, and provide them with safety.
According to industry ministry data, 90 per cent of Bangladesh’s industries are CMSMEs. At rural level, more than 64 per cent of the entities fall under the non-agriculture sector.
CMSMEs provide 85 per cent of the jobs to the industrial sector, and contribute 25 per cent to the economy.
The Bangladesh Bureau of Statistics (BBS) had conducted a “Manufacturing Industry Survey” in 2019 to document the number of SMEs and the employment they provide in the country.
Survey findings show that Bangladesh has around 26,500 SME factories. Of the figure, 23,306 are small, and 3,178 are medium industries. The country also has 16,770 micro and 2,856 heavy industries.
The 2019 data further show that around 54.50 lakh people work at industrial factories across the country. Of the figure, 10.50 lakh work in small, and 5 lakh work in medium industries. The number has gone up in recent times.
Another BBS survey conducted in 2013 had mentioned Bangladesh is home to more than 78 lakh entrepreneurs – including factory owners and traders.
