Page 67 - November 2020

MSMEs in In Bangladesh, urbanization is Corporation (IFC), World Bank By mid-2020, the government has
Bangladesh: Their taking place at a rapid speed. (WB) and the UK’s Foreign, A staggering allocated Tk20,000 crore
Commonwealth and
low-interest funding for MSMEs.
But the rural workforce is still
role and output huge, MSMEs play a pivotal role Development Office (FCDO) has communication gap Bangladesh did launch One-Stop
In Bangladesh, MSMEs form the in rural employment. About 5.8 conducted a joint survey on was also revealed. Service (OSS) and Single Window
largest segment of the national million MSMEs operate in rural MSMEs, and the results show Services to ease business conduct
economy. 87% of the civilian areas, whereas in urban areas, a bleak picture. It was About 61% of MSMEs for exporters and importers. But
population is engaged with MSMEs. there are 2.3 million. So, rural conducted between June and didn’t even hear about MSMEs seem in vital need of
These entities include a quarter of development and the economy is August 2020. The survey government packages. funding which is not present.
Bangladesh’s Gross Domestic very much dependent on MSMEs. encompassed eight divisions
Product (GDP). In terms of resource However, these MSMEs are and included 500 MSMEs in About 14% applied but What to do
generation and utilization, MSMEs essential in urban economies Bangladesh. didn’t receive any The survey revealed a staggering
play a pivotal role. National too. Dhaka alone holds about 94% of MSMEs showed a clear support, while 10% communication gap on behalf of
Industrial Policy of 2016 has 32.2% of the enterprises. 17.1% drop in sales. 37% of the the government funding initiative.
understandably given priority to is in Chittagong, 15.1 per cent in workforce lost their jobs in a said it was too di cult MSMEs need urgent cash inflow
MSMEs. 2005 SME policy also Rajshahi, 13.5% in Rangpur, temporary or permanent level, and complicated to and subsidized loans to operate
speaks likewise. 12.8% in Khulna, 4.8% in and more than 70% were in a use for the funds. 5% smoothly. The government is
2013 National Economic Census Barishal and 4.5% in Sylhet. vulnerable position. 83% of reported to have instructed banks
states there are 1,04,007 micro level, enterprises said they are facing of the surveyed to provide subsidized loans and
8,59,318 small level and 7,106 COVID-19 impact loss while conducting MSMEs failed to ful l stimulus packages to these
medium level enterprises in on Bangladeshi business. Bangladeshi MSMEs the quali cation enterprises. As the survey
Bangladesh. These enterprises were already in a vulnerable indicates, maximum MSMEs were
employ about 5,58,870 people in the MSME position, and the pandemic hit criteria, while the rest unaware of the government
micro, 66,00,685 with small and COVID-19 has created a large them hard. The closing rate of 10% had other incentives of providing stimulus
7,06,112 with medium enterprises. scale negative impact on almost women-owned MSMEs is 37% reasons. funds. A more communicative
Overall, these enterprises are every sector possible. Export while 21% of the male-owned approach might help in resolving
responsible for about 8 million job earnings fell to 33.67 billion MSMEs also stopped their this issue. Bangladesh is notorious
creations. It could be much higher, as USD, a 16.93% decrease operation. for its bureaucratic red tape; some
stats may have missed some facts. compared to the previous fiscal important measure might be
Manufacturing accounts for 36.67 year. More than two-third Bangladeshi necessary in this regard.
billion USD worth of export earnings MSMEs were closed down or cut MSMEs under Several reasons are there behind
in Bangladesh economy. MSMEs short their activities. These MSMEs weakness, and these have
contribution in manufacturing is austerity measures created Corona: Less than Pulse Survey: Impact of been present beforehand. These
about 40%. Contribution of MSMEs in unemployment and 1% gets stimulus Covid-19 on MSMEs in S
issues are to be taken into
the service sector is also very impoverishment for millions of Bangladesh”, only 0.4 per cent considerations; otherwise
considerable. So overall MSME employees. It’s yet not clear funding of MSMEs received financial channelling of stimulus funds
contribution in GDP is way higher when economic activities will COVID-19 pandemic created a assistance from government won’t get the job done. Ease of
actually. commodities of Bangladesh. begin to commerce on full flow. cash strap situation for the institutions. A staggering government regulations and
MSMEs are small scale compared to MSMEs dominate both of these Probably the pandemic and MSMEs in Bangladesh. communication gap was also policies are urgent. In Bangladesh,
industrial giants. So they totally industries. In the 2018-2019 measures being taken to fight it Working capital, machinery revealed. About 61% of MSMEs MSMEs suffer from crucial
depend on locally available raw fiscal year, Bangladesh exported will continue to create a negative and renting capabilities have didn’t even hear about shortcomings regarding safety,
materials. Thus these enterprises are goods worth 40.53 billion USD. impact upon our economy for been exhausted. Many closed government packages. About environment, design, technology,
utilizing local resources for So it won’t be wrong to say that many coming years. down and are in dire need of 14% applied but didn’t receive successful usage of the internet,
production and service sectors. MSMEs dominate Bangladesh’s Worldwide millions of dollars cash incentives to start any support, while 10% said it waste management etc. These
Moreover, these enterprises are not export industry. worth of export orders were operating again. COVID-19 was too difficult and issues, alongside other
capital intensive. So income Most of Bangladesh’s cancelled, industrial demand won’t last forever, already complicated to use for the geographical, social, economic and
generated by these is often saved for manufacturing and service lessened and so did the many economic activities have funds. 5% of the surveyed political landscapes, need to be
reinvestment. It increases national sector industries are production of consumer goods. commenced, and this is likely MSMEs failed to fulfil the taken into consideration to boost
saving as well as the financial concentrated in Dhaka and Lockdown measures around the to increase in the near future. qualification criteria, while the the MSME centric economic model.
security of the people involved. Chittagong. However, 51 districts world resulted in a sharp drop in So cash input, short or long rest 10% had other reasons. As many MSMEs gradually develop
Unlike heavy industries, which have cluster SMEs. If these consumer demands. A large lived, is a must for restarting It’s a grave situation for the into large scale industries, and
require costly and often imported clusters could be developed, section of the workforce stood or boosting the MSMEs. dying MSMEs. About one-third current ones are pivotal for
machinery, MSMEs are mostly economic activities will be more idle, stocked products and Accordingly, the Bangladesh of them are finding it Bangladesh’s massive market and
labour-intensive. They do use decentralized, relieving pressure various equipment decayed and government has channelled impossible to pay the loan in emerging economy, the government
machinery too, but they are mostly on the big cities. Besides, degraded. At the same time, stimulus funding for all types instalments, and about 43% must concentrate more in this
cheap and locally produced. MSMEs could be expanded into global supply chains were of business, but MSMEs have can do it regularly. It’s a sector. Increased funding and other
Readymade garment (RMG) and large scale industries. In fact, disrupted on an unprecedented benefitted very little from peculiar fact that government steps will help the MSMEs to play
leather (raw and processed) are the most of the large enterprises scale. these incentives. According to incentives are not reaching their role in boosting the economy
two most significant export were started as MSMEs. International Finance the survey titled “Business these vital enterprises. after the COVID-19 pandemic.

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