A taskforce has suggested establishment of a separate bank or a similar institution to cater the financing need of the small and medium entrepreneurs.
The taskforce on 鈥楻e-strategising the Economy and Mobilising Resources for Equitable and Sustainable Development鈥� made the recommendation after finding that the present banking system not equipped to cater to the needs of SME financing.
鈥楢 separate bank or similar institution is needed to serve SMEs financing needs,鈥� according to the report prepared by the 12-member taskforce led by KAS Murshid, former director general of the Bangladesh Institute of Development Studies.
In its chapter titled 鈥楽trategies and Action Plan for Development of MSMEs to Enhance Inclusive Growth and Development鈥�, the taskforce report said improvement in accessing institutional finance was imperative for the SMEs accounting for more than 95 per cent of all businesses in the county and contribute to 25 per cent of the gross domestic products.
The draft of the National Small and Medium Enterprise Policy 2025 prepared by industries ministry has also identified that the access to sustainable credit by SMEs as a contentious issue for long.
The unwillingness of banks and financial institutes to provide credits to SMEs became visible with the disbursement of only 27 per cent of Tk 20,000 crore incentive announced by the Bangladesh Bank to tackle the challenge caused by Covid outbreak.
Limited access to finance remained as one of the major challenges for the SMEs over the past decade in Bangladesh, as banks generally favoured larger and well-established companies, according to the White Paper on the State of Bangladesh Economy.
Describing the current SMEs financing windows like Credit Guarantee Scheme and Equity and Entrepreneurship Fund under the Bangladesh Bank flawed or inadequate the taskforce report said the government should provide budgetary allocations to the refinancing scheme and meet up the growing demand for credit of the SMEs.
Describing abundant human capital with inherent aptitude and intellectual capability as advantages the taskforce report also recommended tax break, strengthening the SME foundation, one-stop service centre and developinb聽 Dhaka HAAT to showcase SME products.聽
It also suggested promotion of ICT applications, E-commerce, online support, outsourcing facilities and other technologies for robust growth of SMEs.