Addressing challenges related to impacts on SMEs due to COVID-19 pandemic would require an innovative and holistic approach that tackles regulatory issues, enables easier access to finance and recognises the challenges of the 21st century business landscape, experts opined. These, among many other conclusions were drawn at a dialogue on Tuesday titled “COVID-19 Economic Crisis and SMEs of Bangladesh” held using Zoom online platform. Speaking as the Guest of Honour, Industries Minister Nurul Majid Mahmud Humayun urged to prepare a comprehensive database for CMSME sector of Bangladesh. He said a complete database will help smooth distributing of credit to all affected CMSMEs under stimulus package. The minister also said that the CMSME database can be prepared under Ministry of Industries with the assistance of SME Foundation. Terming SME the lifeline of our economy, the minister emphasised coordinated efforts to frame a long-term planning, new employment generation, SME product diversification, strong monitoring on loan disbursement, health safety and tackling job loss amid COVID-19 pandemic. Welcoming participants, BUILD Chairperson Abul Kasem Khan said that in the private sector, SMEs are the worst victims of COVID-19 outbreak. He apprehended that unemployment may rise and economic dynamism might be stymied unless SME’s current situation improves. Mr Khan urged the government to come up with insights and guidance for small businesses to cope with the operational stress generated by COVID-19. Refinancing scheme can be a useful tool to improve access to finance for the SMEs. Mr Kasem also highlighted concessional loans, tax exemption and digital transformation as possible ways to improve SME situation. Ferdaus Ara Begum, CEO of BUILD, gave the keynote presentation at the dialogue highlighting the ongoing global economic crisis. Ms. Begum said that the CMSMEs in the country are facing severe crisis like shutting down of business units, problems in access to finance, cancellation of export orders, the massive downturn in sales, unemployment, etc. She emphasised SME database should identify real sufferers and requested for clear policies for micro and cottage sector. The session was moderated by Dr. M Masrur Reaz, chairman, Policy Exchange where a number of SME entrepreneurs, policy experts, and practitioners spoke. Dr. Monzur Hossain, senior research fellow¸ BIDS said that it should be recognised that while MSMEs are the main drivers of the economy of Bangladesh, they have received the hardest punch due to COVID-19 pandemic. The stimulus package announced by the government for CMSMEs is undoubtedly a praiseworthy initiative, but the implementation process of this package needs to be more effective to reach the beneficiaries who may find it difficult to avail bank credit, said Mr Hossain. Safiqul Islam, managing director, SME Foundation said that COVID-19 pandemic hit at the time when the business expansion in Bangladesh was occurring very swiftly. Now, the expansion of business as a whole and SMEs in particular has stopped due to the disruption of production owing to the prolonged lockdown, he continued. This crisis can cause workforce layoff in SME sector which can create a huge threat for the economy of Bangladesh. The proper allocation of the stimulus package can be ensured by utilising the Credit Wholesaling Program (CWS) of SMEF, he pointed out. Asif Ibrahim, chairman, Chittagong Stock Exchange Ltd said that the government has set a good example of stimulus package disbursement to RMG workers through mobile banking accounts, and similar efforts should be undertaken for disbursing SME credit. Barrister Nihad Kabir, president, MCCI said that small and medium sectors are often lumped under the same category without taking into account the wide gulf of difference in size between the two sectors. Small borrowers are unable to follow the regulations followed by the medium or large borrowers. Only Tk 300 million was disbursed in the stimulus package of working capital for SMEs, Barrister Nihad said. Shams Mahmud, president, DCCI said that new opportunities have to be explored for solving the crises faced by the SMEs, e.g. there should be a drive for attracting more FDI in the coming days and integrating the SMEs into the value chain through a SME linkage policy. Taxation and VAT related facilities can be given to all RMG and non-RMG sectors in a level playing field to improve the competitiveness and product quality, he added. Mr. Abdul Karim, former principal secretary and former head of PKSF said that for proper utilisation of the government packages, relevant recommendation from BSCIC submitted to Bangladesh Bank via MOI should be implemented soon. Dr. Nasiruddin Ahmed said that corporate tax and turnover tax should be decreased for SMEs. Bank loan interest rate should also be decreased. The Credit wholesaling program of SME foundation should be accelerated. Speakers welcomed the organisation of the timely dialogues to revive the economy through identifying and addressing critical challenges.
