Prime Minister Sheikh Hasina, on April 13, announced the decision on a Tk20,000 crore incentives package for the SME sector. Six months have elapsed, but how the money will be disbursed has not been finalised yet.
Although the prime minister made the right decision, I do not know if those involved in the process are working properly. Not even a second can be wasted during war, but we are still spending days thinking, holding meetings plus preparing notes and minutes like before. As a result, the real work is not being done.
Micro-enterprises are in the worst situation during the ongoing Covid-19 pandemic. Earnings of many enterprises have decreased while many have closed or are on the verge of closure. The country's economic progress cannot be restored until microenterprises scattered in the rural areas turn around. Rural strength is the main structure of our economy.
If the incentives had been disbursed a few days after the announcement of the prime minister, microenterprises would not have faced this predicament. But with time, their condition is worsening. It is also becoming difficult to turn around. Assistance needs to be delivered quickly now.
Apart from PKSF, there are several other organisations that lend to small business entrepreneurs, such as Palli Sanchay Bank and Karmasangsthan Bank. Through them, loans can be given to small business entrepreneurs.
However, bringing some changes to the lending system of specialised banks is necessary. Scrutiny needs to be done by those who know about micro organisations that were closed or somehow survived.
For example, PKSF partners or non-governmental organisations (NGOs) have been working with people for years. There is reliance here. That is why PKSF does not have to worry about delivering assistance to the right people.
Small and medium-sized enterprises can get money from banks. I guess they have already started getting it. But micro organisations do not go to banks. They do not borrow much. They do not even need a large sum.
Meanwhile, banks are not interested in lending to them either. This is because if banks give small loans, their expenses will rise, too. There are some institutional problems with this type of loan. Micro organisations cannot be reached through scheduled banks.
SME Foundation does not arrange loans for micro enterprises. They only do so for small and medium-sized enterprises through banks.
There are 70,000-80,000 small enterprises in the country, and they are mostly in cities. They are especially located in Dhaka, Chattogram and other cities.
On the other hand, there are more than one crore micro enterprises across the country, and most of them are in villages. There are some in cities, but the number is very small. More than three crore people work for these enterprises.
It has been decided that 70% of the Tk20,000 crore bailout package be given to small and micro enterprises. Medium industries will get the remaining 30%. It took a long time for the decision to arrive. However, it has not yet been decided who this money will be disbursed through.
How much small or micro entrepreneurs will get has not been decided either. Small enterprises will get it through banks. The SME Foundation will help in this regard.
Discussions are ongoing with PKSF about delivering assistance to micro enterprises in informal sectors and those located in rural areas. But I do not know yet what decision the government will make in this regard.
The prime minister announced the disbursement of an additional Tk2,000 crore through four institutions apart from the Tk20,000 crore package. Of the four, it has been announced that Tk500 crore will be given to Palli Sanchay Bank, Karmasangsthan Bank, Probashi Kallyan Bank, and PKSF each.
Already, Tk250 crore has been handed over to PKSF. Apart from this, PKSF has started financing small enterprises from other funds.
As soon as PKSF received the money, it approved about Tk3,400 crore at their last two board meetings. The disbursement of money through PKSF partners began last week.
The PKSF money is reaching the right people through NGOs. I do not know the situation of others.
Before the pandemic, the main foundation of our economy was the rural economy in the agriculture and non-agricultural sectors. We do not have a food crisis now, and that is the contribution of agriculture.
Boro production has been good, and that of Aus will be a bit better. Aman production is facing disruptions due to floods. Seedbeds have been damaged and they are being prepared again.
Hilsa production has been good, and so has that of vegetables. Meanwhile, exports are rising. There was a fear that remittances would plummet, but the amount received in July was the highest compared to any month. Incentives are being given in agriculture.
It happens that incentives do not reach the right people, and corruption occurs. Monitoring should be ramped up so that there is no irregularity in the disbursement of incentives.
Dr Qazi Kholiquzzaman Ahmad is the chairman of Palli Karma-Sahayak Foundation.