DHAKA, July 29, 2020 (BSS) – Speakers at a webinar here today called for simpler documentation process for speedy disbursement of stimulus to cottage, micro, small and medium (CMSME) entrepreneurs.
They said most of cottage, micro, small and medium (CMSME) entrepreneurs are yet to get the benefits of announced stimulus package.
They also said existing complex documentation process and lengthy procedures are some of the reasons behind this slow disbursement.
Moreover, BSCIC, SME Foundation, PKSF could be utilized to reach the stimulus to the rural part of the country.
They came up these views at the webinar arranged by DCCI titled “CMSME’s Access to Finance and the Way forward”, said a press release.
Abu Farah Md. Naser, Executive Director of Bangladesh Bank, joined the webinar as chief guest.
DCCI President Shams Mahmud in his welcome remarks said the Cottage, Micro, Small and Medium Enterprises (CMSME) sector represents 13 million business entities in Bangladesh which constitutes about 35.49 percent employment in the country.
He said the prevailing Covid 19-led crisis has affected the sector adversely and for the revival of this sector the government announced a stimulus of Taka 20,000 crore.
But, he said many entrepreneurs are facing challenges in getting loans from the package due to various difficulties.
The DCCI President also said that the non-banking channels can be useful for disbursing loans to CMSMEs. “Moreover, definition of SMEs needs to be unified in all policies”, he added.
N K A Mobin, Senior Vice President, DCCI, presented a PowerPoint on SME Development Department of DCCI.
He recommended for speedy disbursement of loan and bringing unbanked entrepreneurs in the banking channel.
Mobin suggested that the government may introduce alternative source of financing besides banks with a focus to lessen cost of doing business.
He also urged to provide more credit facilities to the backward linkage industries as well as proposed to formulate an action plan to bring the rural CMSMEs into the export oriented market.
Abu Farah Md. Naser, Executive Director of Bangladesh Bank, said that Taka 20,000 crore stimulus is for a 3- year term so that the source of fund can run smoothly.
“If the stimulus rolls out for three years its effective amount will be 60,000 Taka.” he said in terms of handling small entrepreneurs’ risks of loan classification as very low.
He said credit guaranty scheme will ease the access to finance specially for the CMSMEs and he termed it as a primary initiative.
Naser suggested the entrepreneurs to keep their marketing chain active. He said Bangladesh Bank will consider whether lending as working capital can be treated as term loan.
He also said that other non-banking institutions may be included to disburse stimulus.
Answering to a question of the DCCI President, he told that Bangladesh Bank eased capital requirements for the startups so that they can get loans easily.
Akhil Ranjan Tarafder, General Manager of BSCIC, said the non-financial services should be given to the sector to train them.
He also said that Taka 20,000 crore as stimulus is not sufficient; the sector needs more money to bring more CMSMEs under this umbrella.
He informed that 50 industrial estates on 20 thousand hectors land area will be established by BSCIC.
Nazeem Sattar, General Manager, SME Foundation called for framing a guideline for small entrepreneurs.
He said Bangladesh Bank also allows some institutions like SME Foundation, BSCIC, PKSF to disburse loans to SMEs.
Syed Abdul Momen, Head of SME, BRAC Bank Ltd, Sanjib Kumar Dey, Head of SME from Mutual Trust Bank, Anwar Faruque Talukder, EVP, Dutch Bangla Bank Ltd., Sk. Moyeen Uddin, Additional DMD, EXIM Bank, Md. Afzal Karim, DMD, Bangladesh Krishi Bank, Syed M Omar Tayub, Head of MSME, Prime Bank, Mohammad Emtiaz Uddin, EVP, Premier Bank and Kamrul Hasan, Head of SME, One Bank also spoke.
DCCI Vice President Mohammad Bashiruddin gave the concluding remarks.