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Group Discussion on “Reform of SME Policy-2019 for Sustainable Growth and Innovation”
Dhaka Chamber of Commerce & Industry (DCCI) organized a focus group discussion on “Reform of SME Policy-2019 for Sustainable Growth and Innovation” at DCCI on 19 October, 2024 at DCCI auditorium. DCCI President Ashraf Ahmed presented the keynote paper in this event. He said that only agro-based economy will not alone be sustainable for the overall economy rather we have to go for industrialization and export of service sector should be enhanced. He also said that CMSME sector is a large sector that has the capacity to create adequate employment opportunities in the country. About .5 million graduates come into the job market every year and if we promote CMSME sector to grow, they will be able to create enough employment creation for these educated unemployed graduates. He also suggested to redefine the definition of SME and also uniqueness of the new definition for all government agencies including Bangladesh Bank that will help SMEs to get easier loan facility. He also put emphasis on easy access to finance, new model of financing like electronic nano-financing model, electronic channeling, automation of licensing and its renewal, high skills availability, intellectual property protection, high-speed broadband internet facility, addressing non-tariff measures and access to technology for the development of SME sector. He also proposed for setting up a ‘National Industrial Standard’ for ensuring quality of products focusing to international market. Moreover, he suggested for a comprehensive database of SMEs including informal sector so that we can bring the informal sector into the formal sector which will be added to the overall economy. The President of Dhaka Chamber also expressed his opinion that the goals and objectives of the SME policy should be determined in conjunction with the industrial policy and the five-year plan to set the future goals of the entire industrial sector. Along with this, he emphasized on the inclusion of SME policy objectives in the budget and work plan activities of various organizations.
Md. Salim Ullah, Additional Secretary (Policy, Law & International Co-operation), Ministry of Industries said that the government is trying to formulate an international standard SME Policy and for that he sought cooperation from all stakeholders. All the shortcomings of the previous policy will be addressed and the new one will try to reflect the requirement of all stakeholders for the betterment of SME sector as a whole.
Md. Anwar Hossain, Vice Chairman, Export Promotion Bureau said that the main task of EPB is to promote export oriented industries including SMEs. He also reiterated the importance of automation in all client service activities of the government and EPB is also trying to make its all services automated soon. He also said that we need to strengthen the backward linkage industry especially the SME sector and NBR should consider simplified tax filing process especially for CMSMEs as too much documentation process will be a burden for them. Beside ISO certification, we need to set our own standard for our exportable products so that we can improve our products competitiveness in the global market, he added.
Mirza Nurul Ghani Shovon, President, National Association of Small and Cottage Industries of Bangladesh (NASCIB) said there is a lack of coordination among the agencies. He also said that if the government does not arrange required fund for implementation of new SME Policy, it will also remain unimplemented again. He also suggested to keep arbitration system in the new SME Policy. Informal SME sector should also come under the new policy, he added.
Md. Mahbubur Rahman Palash, Executive Vice President & Division Head, MSME & Emerging Business, Dhaka Bank PLC said that the government is going to reform the existing SME Policy 2019 after five years. He suggested that in the new policy, trading sector, which is also a big sector should not be ignored. Despite there is a guideline to disburse 25% of total loan to the SME sector by the Bangladesh Bank but it was not achieved and it is hovering around 17% to 17.5%. He suggested easier documentation processes for the SMEs so that they can get easy access to capital fund.
Md. Mosharref Hossain, Associate Professor, Bangladesh Institute of Bank Management said without government’s patronization SME sector will not develop. He suggested to establish a SME innovation lab where small innovators will get a place to flourish. They should also get easy access to finance, he added. Government should have a separate seed fund/venture capital or startup fund for the SME entrepreneurs and a roadmap is also needed to implement the policies.
Md. Kyser Hamid, CEO & Managing Director, Bangladesh Finance Limited said all the financing organizations either it is bank or NGO or MFIs, they want to give loans to SMEs but due to current financing model the disbursement ratio is bit low. He also suggested to include renewable energy sector in the new SME policy and incentivize the sector.
Nawshad Mustafa, Director, SME & Special Programmes Department (SMESPD), Bangladesh Bank said that there is a need of having various refinancing schemes and credit guarantee schemes because there are different types of SME entrepreneurs and their needs are also different. He also urged for a common facility centre to promote small and cottage entrepreneurs across the country.
Mohammad Yakub Hossain, Executive Director (Regulation, Research), Microcredit Regulatory Authority said last year micro financing institutes disbursed 260000 crore taka loan to the SME sector. 90% of them were also women. He also suggested easier documentation process for the SME entrepreneurs to get easy access to loan. He said there is no alternative but to go for automation to avoid corruptions. He later suggested that SME Foundation should spread their activities upto Upazila level.
Kazi Mahabubur Roshid, Director (Skills & Technology), Bangladesh Small & Cottage Industries Corporation (BSCIC) said that industries should not be established outside the economic zones. He also said that inter-ministerial coordination is very important for the development of SME sector. BSCIC and SME Foundation can play a vital role for financing the SMEs.
Khondoker Mostak Hosaien, AVP, Lanka Bangla Finance PLC said that if we bring the rate of default loans of SME sector down, then more SMEs will get its benefits. He also said that direct engagements of financing institutions with the entrepreneurs will strengthen bondage and facilitate their growth.
Published on: 2024-10-19