BSEC will provide full support to help SMEs grow, says its chairman

Entrepreneurs in the small and medium enterprise (SME) sector needs adequate financial and logistic support as well as proper nurturing to grow, said BSEC Chairman Professor Shibli Rubayat-Ul-Islam, adding the securities regulator is ready to provide all sorts of support in this regard.

"Those who have a turnover of Tk10 crore in the SME sector today will one day surpass Tk500 crore business. That is why they need to be properly cared for with low-cost capital and other logistical support," said the BSEC chairman on Saturday at a seminar styled "Role of Capital Market on SME Sector", organised by a newspaper.

At present it is not possible for most of the companies in the SME sector to have a good accountant with the profit they make. Therefore, companies cannot keep their income and expenditure accounts properly documented, he observed, adding, "Considering this, we provide them with many facilities. We will give more if necessary."

Mentioning that SME boards have been set up on the bourses, he said SMEs can easily raise funds from there. But as investment in small firms is relatively more risky, the Bangladesh Securities and Exchange Commission does not allow general investors to invest in this sector.

Those who are qualified or wealthy investors have the capacity to take this risk, he added.

Explaining the importance of the SME sector, the BSEC chairman said famous car maker Toyota requires 30,000-40,000 small parts to make a car and those parts are manufactured by SMEs. "If Toyota itself manufactures these parts, prices of its cars will go up a lot."

"The US Company Tesla uses software to make electric cars, which is supplied by China-based SME companies. But due to the US-China trade tension, the supply of this software was stopped, which led to a halt in the company's car production."

Mirza Nurul Ghani Shovon, president of the National Association of Small & Cottage Industries, said SMEs have been doing business for more than 30 years but there is no separate policy for this sector. Even these traders do not know how they will get financing or where their products will be sold, he added.

He, however, said there are many unscrupulous entrepreneurs in the SME sector as well, who embezzle money received from the government or banks. The best example of which is the government's EDF (Entrepreneur Development Fund), he continued.

Speaking on this issue, the BSEC chairman said the commission will take strict action against intentional defaulters or embezzlers.

Meanwhile, Sayedur Rahman, president of the Bangladesh Merchant Bankers Association (BMBA), put forward four specific proposals for the development of SMEs.

He called for exempting SMEs from paying dividends for at least two years after enlistment, reducing tax and VAT rate to 5%, and relaxing eligibility criteria of eligible investors to increase the transactions of SME companies in the secondary market of the stock market.

The BSEC chairman said they will look into the matter. He, however, suggested that more seminars be organised on the bank loans and tax rates issues with the governor of the Bangladesh Bank and the chairman of the NBR.