Page 77 - IBT December 2020

Coronavirus and national identity cards and numbers of traders to start their The trade owners applied for it. At least 10% found
economics of small guarantors. business again. It will be easy for association and other the process of applying for
trading Recently IFIC bank went into an them to repay the money too. It’s financial help to be difficult
Jamshed, a roadside vendor agreement with the Bangladesh difficult and in many cases nearly bodies are demanding while 5% of the surveyed
selling snacks beside the Shop Owners Association to impossible for these traders to collateral-free loans given enterprises don’t fit in the
Shaheed Minar of capital provide collateral-free loans of up arrange the necessary money for against documents like an qualification criteria. Another
Dhaka has resorted to to fifty thousand takas to small procuring a trade license or do 10% had different issues
rickshaw pulling. Before the traders. But the authorities of other formalities regarding it. ID card and guarantors. regarding these packages.
pandemic, his business was in Bangladesh Bank took swift Many are not even familiar with There have been additional Recently, Bangladesh Bank
full boom, selling snacks up to action against it by banning this the process of getting one. A demands asking for an issued instructions to provide
about BDT1000 a day. His process. Now easy cash incentives simple, efficient micro-loan loans against guarantors only.
business especially got busy in are almost absent for small program can help this section a exemption from VAT up to Shop owners also think
the evening when numerous traders. To procure a trade license lot. It will also be a great incentive the mark of BDT50 lakh collateral free loans can be the
bystanders and visitors in Bangladesh one has to spend for boosting the lagging economic annual turnover. In this solution. So they welcome
gathered around his little cart around BDT8000. Now a small activities of the country. government decisions regarding
for buying snacks. It was his trader who sells his product in way, the government can it. But the catch is, all small
only source of income; his van or portable stores, can’t amass Government packages help these large numbers traders don’t possess trade
family and two school going this amount of money quite and loans of traders to start their licenses. So they fear many will
kids depending on it. Now there are one or two helping reasonably. He is already in The government of Bangladesh miss the opportunity. However,
since the pandemic has hands. Due to the pandemic, desperate need of money, living did not sit idle during the business again. it’s not all the government’s
created an abhorrence of about one-third of them are now from handouts, or the trickling pandemic. Micro, Small, and fault or lack of goodwill. The
roadside foods among general jobless and more than 70% are in income he or she might still have Medium Industries (MSMEs) play banking sector of the country is
people, Jamshed had no other vulnerable situations. from various sources. A small a crucial role in the economy. So already under pressure as they
way other than closing his Complexities with trade licenses amount of BDT15000 to BDT when the COVID-19 impact was Another problem lies regarding are instructed to go easy for
the reach of government
shop. This is not the only and the new instruction of the 30000 might do the trick for him. affecting them negatively, the installment payments from big
example. Many small traders Bangladesh Bank to not provide a But it is reasonably very hard for government provided a stimulus incentives. There are at leas businesses. Huge loans have
1,04,007 micro-level and 8,59,318
also had to close down their loan without it has made business him to provide BDT 8000 to get a package of BDT20,000 crore. been given out to large business
main income source due to recovery far more difficult. little loan of that amount. Also, a There were also initiatives like small level enterprises in the companies, specially those of
country. Many of these are trading
government-imposed tax return has to be submitted One-Stop Service (OSS) and Single the RMG sector for enabling
lockdown. It was for the The problem with loan per month if one is doing business Window Services to ease the enterprises. According to a report swift recovery. Specialists warn
published by IMF titled,’ Business
greater good, understandably. and cash with a license. Unable to do that business procedures. However, that in near future, banks will
But now since most of the In Bangladesh, to get a loan from will instigate a fine of BDT very little has been done Pulse Survey: Impact of COVID-19 find it difficult to bring back
on MSMEs in Bangladesh”, the
stalled economic activities are banks one has to have a trade 10,000. specifically targeting small traders these payments. Moreover, it’s
coming back to life, Jamshed license. But the problem is, That’s why the trade owners who also fall under the MSME percentage of MSME’s who have even harder to get back small
received government financial
and many like him are finding because of bureaucratic hassle association and other bodies are category. Large-scale aid programs amounts of money lent to
it hard to reopen their and complex procedures, a large demanding collateral-free loans have indeed been directed towards assistance stands at 0.4%. 61% of traders. This might be a reason
the rest didn’t even know about
businesses. part of small traders don’t have given against documents like an poor and low-income people but behind the reluctance to provide
Capital is the main problem. this document. They have been ID card and guarantors. There aid is certainly not the permanent these packages while 14% didn’t a loan without a trading license.
receive any though they have
For several months there has doing business like this for years. have been additional demands solution. Small and medium enterprises
been little or no income for Now since they are desperately in asking for an exemption from VAT and traders employ about
small traders. By mid-April, need of cash, the small traders up to the mark of BDT50 lakh twenty million people and their
small traders were losing association is demanding annual turnover. In this way, the GDP share in Bangladesh
about one thousand crore a collateral-free loans against government can help these large economy stands at 25%. So far,
day due to low or no-sells. No various estimates suggest this
customer was there to buy sector lost around 92 thousand
their goods. But food, crore due to the pandemic. While
accommodation, and many are recovering through
household bills don’t come free their efforts, a large section is
so they had to resort to their lagging. Hence many small
savings. Now several months traders are asking for quick,
of income deprivation means hassle-free loans given to them
these cash-starved traders are based on ID and guarantor.
unable to reopen their Retrieving the loan back might
businesses. They need loans or be a problem, true, but there is a
any sort of financial help to do good chance that traders are
so. But this economic asking for something which
incentive seems to be absent. might be very reasonable, given
Small traders not only work as the pandemic and uncertain
individuals but in many cases, economic activities.

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