Lack of skills development main drawback of SME: Experts

Top businessmen and government policymakers consider the lack of skills development among entrepreneurs and employees of government institutions as the biggest challenge for Small and Medium Enterprises (SMEs).

There is also scope for development in access to finance and market access, said experts at a seminar titled "Opportunities and Challenges in the SME Sector" organised by the Economic Reporters Forum (ERF) on Monday.

The experts also suggested simplifying the process of taking loans and eliminating the middleman.

The vast potential of the SME sector can be utilised only by connecting entrepreneurs with international markets. It will strengthen the country's economy by alleviating poverty through job creation, added the experts.

Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) President Mahbubul Alam said, "There is no alternative to developing SMEs to make smart Bangladesh a reality. SMEs must be promoted for the advancement of the country. There is no time to look back, you have to think big."

He said financing is still a big problem here. Due to procedural complications, despite the presence of many funds, they are not utilised. Again there are obstacles in entering the international market. To advance the SME sector as a whole, there is a need for coordinated initiatives by the government and the private sector.

Mehmud Hossain, managing director of National Bank, said, "There are psychological problems in lending to the SME sector. A loan requires many documents. But both bankers and entrepreneurs are not interested in this. Lack of required skills is one of the reasons. Due to this lack of interest, the SME sector is lagging behind."

He said Bangladesh Bank has set a target for banks so that 24% of total loans are provided to the SME sector, but achieving that is challenging.

SMEs mostly repay loans without any default, if more loans can be given to this sector, SMEs will flourish, he added.

Sameer Sattar, president of the Dhaka Chamber of Commerce and Industry (DCCI), said political will is needed for the advancement of SMEs. Access to finance should be made easier, documentation should be simplified and funding from Credit Guarantee Scheme should be increased. If SMEs do not progress, the country will not progress.

Medium Enterprises should be weeded out from SMEs, or the little ones will be deprived. Incentives should be given in cooperation with small industries and LC margin should be kept lower, he added.

Training should be given to SMEs to enter the international market, said Sameer Sattar.

Masudur Rahman, chairman of the SME Foundation, said the SME sector is lagging behind the competitor countries. There is a shortage of funding, and interest rates are high. In every case, the SME sector is facing obstacles.

Market access should be facilitated to unearth the potential of the SME sector, he added