SMEs play an important role in economic and social development, particularly in poorer countries and Least Developing Countries (LDCs). SMEs can directly serve international markets by beginning to export to distributors or to final consumers located in foreign markets, said Kazi Sayedur Rahman, Deputy Governor, Bangladesh Bank on Monday.
Kazi Sayedur, also the Chairman of BIBM Executive Committee, was addressing a seminar on “International Trade Finance and SME: Bridging the Gap” as the chief guest, organized by Bangladesh Institute of Bank Management (BIBM) at its conference room..
He mentioned that the Small and medium-sized enterprises (SMEs) account for around 90% of companies and more than half of the jobs worldwide according to the World Bank data.
According to WTO estimates, based on data from World Bank Enterprise Surveys for over 25,000 SMEs in the manufacturing industry in developing economies, SMEs’ direct exports represent on average just 7.6 per cent of total manufacturing sales. In contrast, large manufacturing firms, with more than 100 employees, directly exported 14.1 per cent of their total sales, he added.
However, SMEs are disproportionately affected by trade finance gap. The disproportionately small share of exports from Small and Medium Enterprises (SMEs) is a cause of concern in modern trade policy.
The small share of SMEs to international trade can be expanded by bank led trade finance as banks provide trade finance and facilitation to their traders. In recent times, banks’ facilitation and trade finance is also important for SMEs due to improved technology literacy and Covid-19 pandemic.
SME and Special Programmes Department of Bangladesh Bank is providing different refinance facilities for cottage, micro and small industry.
Presently, SME and Special Programmes Department of Bangladesh Bank is running 5 refinance schemes from its own funds and 6 projects with assistance from JICA, AIIB, and European development partners in the CMSME sector, which are revolving in nature.
Dr. Ashraf Al Mamun, Associate Professor & Director (Research, Development & Consultancy) of BIBM delivered welcome address. Dr. Md. Akhtaruzzaman, Director General of BIBM chaired the program.
Md. Abdus Salam Azad, HFF, Supernumerary Professor, BIBM; Md. Abdul Jabber, Managing Director & CEO of Janata Bank PLC; Mohammad Abu Jafar, Acting Managing Director, Dhaka Bank Limited; M. Khurshed Alam, Deputy Managing Director of Eastern Bank PLC made comments as designated discussants.