DHAKA, June 6, 2021 (BSS) – Speakers at a webinar today stressed the need for putting more attention to the Cottage, Micro, Small and Medium Enterprises (CMSMEs) as well as ensuring speedy distribution of funds from the stimulus packages to ensure their sustainable recovery from the COVID-19 pandemic alongside ensuring digitization of those through formulation of a database.
They also put emphasis on further expanding and making flexible the credit guaranty scheme so that the entrepreneurs could maximize their benefits, developing alternate source or mechanism apart from the banking system for distributing stimulus funds towards the CMSMEs so that the unbanked entrepreneurs could get the benefits and further motivating the CMSMEs to boost their export earnings.
They came up with such views at a webinar on “Impact of Covid-19 on CMSMEs and Understanding their Recovery: Evidence from BSCIC Industrial Estates” organized jointly by Economic Reporters’ Forum (ERF) and PRISM Programme through virtual platform.
Industries Minister Nurul Majid Mahmud Humayun attended the event as the chief guest.
Ambassador and the Head of Delegation of the European Union to Bangladesh Rensje Teerink, Industries Ministry Additional Secretary Golam Yahia, Chairman of the Bangladesh Small and Cottage Industries Corporation (BSCIC) Md. Mostaque Hassan joined as special guests.
Former Governor of Bangladesh Bank Dr. Atiur Rahman, President of Dhaka Chamber of Commerce & Industry (DCCI) Rizwan Rahman, Chairman and CEO of PRAN-RFL Group Ahsan Khan Chowdhury and Chairperson of Business Initiative Leading Development (BUILD) Abul Kasem Khan attended the webinar as panel discussants.
Research Director of BIDS, and one of the senior short-term consultants of PRISM project Dr. Monzur Hossain presented the keynote paper.
Team Leader, Technical Assistance to BSCIC – PRISM Programme Ali Sabet gave the welcome remarks.
ERF President Sharmeen Rinvy chaired the event while General Secretary S M Rashidul Islam moderated it.
The Industries Minister said that the CMSMEs are the most affected during the pandemic situation while the government had rightly announced a Taka 20,000 crore stimulus package for these enterprises.
In addition to this, Humayun informed that another Taka 1,500 crore stimulus package had been announced so that the entrepreneurs in the rural areas could avail it. Out of that amount, Humayun said Taka 300 crore has been allocated against the SME Foundation which will distribute Taka 100 crore in the outgoing fiscal year while Taka 200 crore in the next fiscal year (FY22).
Mentioning that there is no alternative for expanding the CMSMEs, he said that these are playing an important role to boost the country’s GDP growth through increasing export earnings and creating more employment.
The minister said that optimum utilization of the stimulus packages should have to be ensured in an innovative way through extending support to the concerned stakeholders.
Ambassador and the Head of Delegation of the European Union to Bangladesh Rensje Teerink lauded highly about the prompt response from the government of Bangladesh when the pandemic hit the country. “The government responded very swiftly to the pandemic,”
She said it is instrumental to scaling, upscaling and rescaling of the workforce of the enterprises in the country to get better outcomes.
She opined that a comprehensive unique social protection system should be put in place.
The EU Ambassador also mentioned about the allocation of 130 million Euro budget support to the government.
Industries Ministry Additional Secretary Golam Yahia said that the CMSMEs are playing a big role towards industrialization of the country while Bangladesh would turn as a developed nation by 2041 through successful implementation of the SME Policy.
BSCIC Chairman Md Mostaque Hassan listed various initiatives of the Corporation to facilitate the cottage, micro and small industries saying that the factories in countrywide BSCIC industrial estates remained in operation braving the pandemic situation.
He said that the BSCIC has made time befitting its training programmes, its online service will be inaugurated on June 13, online marketing will be launched soon while a master plan has been taken to make export diversification.
Former Bangladesh Bank Governor Dr Atiur Rahman said that the government would have to think about rolling out the 2nd round of stimulus packages to the affected industries before the first round of the stimulus packages ends.
He said that the rules and regulations of the central bank as well as its credit guaranty scheme should be more simplified adding: “Not only the money, but also easing of the rules is stimulus….giving hope to people is also very important,”
Drawing attention of the Industries Minister, Dr Atiur said the BSCIC industrial estates could be turned into state of the art ones where modern facilities, available in the special economic zones, could be replicated there.
He also advocated for providing special stimulus or fund from the budget to those affected enterprises in the districts like Khulna, Satkhira, Natore where lockdown is being enforced to rein in the COVID-19 infection rate.
The former Bangladesh Bank Governor said BSCIC should act like a “midwife” and develop the value chain, put attention on diversification of markets, sourcing of raw materials.
He said that the CMSMEs can play a very important role in the “Green Recovery”. “Bangladesh is a success story and it will continue to be one of the success stories.”
Dr Atiur also termed the proposed budget for FY22 as business friendly and people friendly.
Chairperson of BUILD Abul Kasem Khan stressed the need for addressing the barriers in availing support from the stimulus packages and also demanded for time-bound speedy disbursement of funds.
He said that apart from the banking sector, alternate source or mechanism should be developed for distribution of this fund so that the unbanked entrepreneurs could avail support.
Kasem, also a former DCCI President, said that delayed or deferred payment systems could be introduced as the CMSMEs are in pressure with the payments of VAT, tax and utility bills.
He said that formulation of a database for the CMSMEs is very important as it will help to make better policy design.
Chairman and CEO of Pran-RFL Group Ahsan Khan Chowdhury said that the entrepreneurs were benefited from the stimulus packages during the pandemic and if the micro and small entrepreneurs could be protected through financing, then they would be able to make a turnaround.
He said that the BSCIC could create a linkage between the large-scale industries and small industries while it should give more attention to the CMSMEs to ensure their revival.
Welcoming some specific proposals in the budget especially for the automobile sector, VAT waiver, some benefits for the CMSMEs, DCCI President Rizwan Rahman said that one simple car production needs some 8,500 spare parts and it would develop backyard linkage in the country. “It’s just a start”.
He suggested withdrawing the provision of advance income tax considering the pandemic situation.
The DCCI President also proposed for providing 50 percent of the government stimulus package to the micro, cottage and small industries, withdrawing tax on Facebook ads to spur the growth of e-commerce market, digitization of SMEs, providing fiscal literacy training to the bankers.
Dr Monzur Hossain of BIDS in his presentation showed that 96 percent number of firms were affected during the lockdown owing to the pandemic while the CMSMEs recovered up to 80 percent of their production by December last year.