SMEs’ contribution to GDP expected to hit 35% by 2030

Today, 27 June, is the International SME Day. The day is being observed in Bangladesh like elsewhere in the world. In an exclusive interview with The Business Standard's Staff Reporter Joynal Abedin Shishir, SME Foundation Chairperson Professor Md Masudur Rahman speaks about the problems and prospects of the SME sector in Bangladesh. He also throws light on various activities of the foundation for the development of the sector.  

The special role and contribution of small and medium enterprises (SMEs) in a nation's economic growth and poverty alleviation is globally recognised.

No country can achieve sustainable economic development if its SME sector remains underdeveloped. This is because the growth of SMEs helps improve economic conditions at the very marginal level of society.

The SME sector accounts for over 50% of the gross domestic product (GDP) of most of the developed countries in the world. The ratio is 60% in neighbouring India, and 45% in Vietnam.

In our country, however, SMEs constitute 25% to 27% of the GDP, and yet the sector holds 80% of total industrial jobs here. So, there is no doubt that the SME sector is an important part of our economy.

As of 2013, there were78 lakh SME entrepreneurs in the country, but my assumption is that the figure has surged to more than one crore by now.

The SME Foundation is working to raise the SME sector's contribution to the country's GDP to more than 35% by 2030, as part of the government's endeavour to achieve the global agenda of sustainable development goals (SDGs).

The foundation has thus far provided various types of training to more than 40,000 people, including entrepreneurs, under about 1300 training programmes, of which 60% are women. The foundation has identified 177 SME clusters across the country and is working on their development. So far, the foundation has organised nine national SME fairs, 126 regional SME product fairs at the divisional and district level to help entrepreneurs build connections with customers. Besides, four Heritage Handloom Festivals have already been organised at the national level.

Considering the various challenges faced by women entrepreneurs who constitute a large part of the SME sector, SME Foundation is carrying out various activities. We have a separate wing for women entrepreneurs. In order to increase their capacity, we have imparted various types of training to more than 9,000 women entrepreneurs under about 300 special training programmes.

The SME Foundation has disbursed loans among 736 pandemic-affected women CMSME entrepreneurs – 26% of the total loan recipients.

Since 2007, the number of women entrepreneurs in the country has increased by 120%. So far, 14 women entrepreneurs' associations have been formed across the country.

The biggest problem in the SME sector is that entrepreneurs' small capital faces big risks. Also, a lack of access to long-term loan facilities at low interest, the rare use of modern technologies, and a lack of communication with international businesses are some major barriers to the sector's growth.

Millions of SME entrepreneurs living in rural areas are the future of Bangladesh. The country will be able to implement its vision of 2041 easily if the problems faced by the SME sector are properly addressed.

Setting up product exhibition centres, constructing a dedicated building for SME Foundation, arranging low-interest loans for entrepreneurs, and converting the SMEs into a formal economic sector will play a huge role in this respect.