The small and medium enterprises (SMEs) are yet to get required assistance from the government announced stimulus packages to tackle coronavirus fallout. Loan processes need an immediate simplification as those are often prompting procrastination against the backdrop of the ongoing crisis.
Discussants said this Wednesday while addressing a webinar organised by the Dhaka Chamber of Commerce & Industry (DCCI).
The programme titled "Financing the Cottage, Micro, Small & Medium Entrepreneurs and Alleviating the Virus Situation" also advocated for including the Bangladesh Small and Cottage Industries Corporation (BSCIC), SME Foundation and Palli Karma-Sahayak Foundation (PKSF) in the loan disbursement process.
DCCI President Shams Mahmud said the SMEs are playing an important role in employment generation and GDP growth.
He said, "The SMEs were affected by the pandemic like other sectors and the government has announced Tk20,000 crore in stimulus to salvage the small businesses. But the entrepreneurs are facing challenges both in availing the assistance and getting required information."
Referring to a survey, DCCI Senior Vice President NKA Mobin said that 59 percent of SMEs believe borrowing from banks is complicated.
He said, "Contribution of SMEs to the country's GDP amounts to 25 percent while the sector alone generates 35.5 percent of total employment. Small businesses contribute 75-80 percent of total export."
The DCCI senior vice president said the pandemic slashed 35 percent of sales of the small businesses, and more than 62 percent of entrepreneurs were no longer able to pay salaries to their staff.
He called for making the loans from the stimulus packages simple and speeding up the loan disbursement process for the small firms.
Bangladesh Bank Executive Director Abu Farah Md Naser joined the programme as the chief guest. He asked the banks to examine borrowing capacity of the entrepreneurs.
Besides, he urged the SMEs to give more emphasis on supply chain management for marketing.
Naser also assured that they would consider whether the assistance from stimulus -- meant for working capital -- could be disbursed as term loan.
BSCIC General Manager Akhil Ranjan Tarafder said only 28 percent of SMEs avail bank loans and the banks should be cooperative to raise the borrowing rate.
SME Foundation General Manager Md Nazeem Hassan Satter said the foundation was formulating a guideline for SMEs who would borrow from the stimulus.
He also suggested the small businesses apply for collective loan.
Industries ministry Joint Secretary Ferdousi Begum recommended strengthening monitoring of the central bank so that the SMEs can avail government assistance.
During the open discussion, SME Banking Head of Brac Bank Syed Abdul Momen said defining SMEs according to their trading is problematic for lending.
He believes the definition needs correction.
Mutual Trust Bank's SME Banking Head Sanjeeb Kumar Dey said they had set the target to disburse Tk301 crore from the stimulus package, and hopefully would be able to achieve the goal by next December.
Dutch-Bangla Bank Executive Vice President Anwar Faruq Talukder said their lending target under the stimulus package was set at Tk340 crore.
Exim Bank Additional Deputy Managing Director Sheik Moyeen Uddin, Krishi Bank Additional Managing Director Md Afzal Karim, Prime Bank SME Banking Head Syed M Omar Tayub and One Bank SME Banking Head Kamrul Islam, among others, took part in the open discussion.