SME contributes to economy in multi-dimensional ways

Terming the country’s Small and Medium Enterprises (SMEs) as the driving force behind economic growth, employment generation and poverty alleviation, experts on Thursday said it has a multi-dimensional contribution to a nation’s development. The experts came up with these statements at a programme titled ‘Women entrepreneurs in SMEs sector: Bangladesh Context 2017’ held at CIRDAP auditorium in the city.

These enterprises require minimum capital and are easy to start, labour intensive and produce goods that meet local demands as well as bring export earnings, they added. Speaking on the occasion, Industries Minister Nurul Majid Mahmud Humayun said that the government is providing focused support to this sector viewing it as having a huge potential.

Describing the small and medium industries as the main driving power of the country’s economy, the minister said, the sector is contributing to increasing export, product diversification, creating employment opportunities and overall socioeconomic progress by poverty alleviation.

“SME foundation research study will play an important role in formulating policies and programs for the development of women entrepreneurship. All concerned of the sector including researchers, development workers and development partners will get benefits from it,” said Humayun.

At present 90 percent of the country’s trade and industries are under SME coverage. The sector is controlling 70 percent of the country’s economic activities. Of the total industrial employment, on an average 80-85 percent have been generated from this sector. The sector is meeting 30-35 percent of the total local industrial demand also.

Earlier, in September the cabinet approved in principle the draft of the small and medium enterprise policy to boost the industry and increase its contribution to the GDP up to 32 percent by 2024 from the existing 25 percent. The draft of The SME Policy, 2019, first of its kind, has been approved in line with The Industrial Policy.

SMEs are now being run under a strategy of 2005 as there is no SME policy. The draft policy was formulated to achieve six targets-- ensuring access to finance, access to technology and innovation, access to market, access to education and training, access to business support services, and access to information for the SME entrepreneurs.

The policy will benefit 78 lakh SMEs as the government wants to give them a strong footing. The SMEs are currently contributing 25 percent to the GDP while micro and cottage industries will also be treated as SMEs. And the government has set a target to increase the SMEs’ contribution to the GDP to 32 percent from the existing 25 percent.

Under the policy, a SME Credit Guarantee Fund’ will be introduced to simplify the loan system for the entrepreneurs and no mortgage will be required for getting the loan. The SME Policy will be implemented from 2019 to June 2024 while two separate committees — a 37-member committee headed by the Industries Minister and a 29-member committee headed by the Industries Secretary– will be formed to supervise the implementation of the policy.