SME sector hit hard amid corona crisis

29 Jun 2020 11:05 AM
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Entrepreneurs in small, medium and cottage sector have already been hit hard by the disruption caused by the coronavirus pandemic, producing a steep fall in sales and affecting jobs and income.

Many SME entrepreneurs had to shut their procedure while many are struggling to survive. As the SMEs are struck by the pandemic, many business owners said they will be facing difficulty in getting advantages from stimulus deals and loans from banking institutions and finance institutions in the time of need. In addition they said that the federal government must pay special attention to the SME sector and develop a crisis support system.

Based on the Bangladesh Bureau of Figures, there happen to be 5.5 million SMEs with about 15 employees each and the ones SMEs constitute 39 % of total organizations in the country.

World SME Discussion board said there remain 6 million small, method and cottage industries found in the united states and Bangladesh ranks seventh on earth in terms of the size of the SME industry.

Entrepreneurs fear if the monetary stalemate continues for months, 50 percent of the SMEs must shut down their procedure and around 7 million jobs will get affected.

Various entrepreneurs said they are operating their business in a limited scale and several had to temporarily stop their business because of disruption in the supply chain, unavailability of recycleables and a drastic fall on sales.

Kazi Sajedur Rahman, chairman of KPC Industries, said he is operating his mills on a restricted scale but the go back has been suprisingly low though the fixed cost like salary, bills have remained the same.

“Most of the compact and medium entrepreneurs don't have much savings while the majority of them are employing small capital,” he said, adding that the sudden jolt possesses pushed them right into a state of uncertainty.

He also demanded better access to financing from the incentive bundle for the tiny entrepreneurs without the hassle.

Rashedul Karim, who owns Creating BD, underscored the need for expanding the extent of the neighborhood industry for survival and good policy approach for the products created by the SMEs.

The government should bring impressive policy like discouraging import of products which can be found locally and ensure a linkage between your supply chain and big industries, he said.

In a recently available survey completed by BUILD, around half of the SME enterprises had to stop their operation temporarily or permanently amid the COVID-19 crisis.

As a result of shutdown, most smaller businesses were at a good standstill for a lot more than 90 days, struggling to fork out salaries to their staff and bear different related costs.

The situation is fairly bad in rural areas. Steps Towards Development (Techniques) and the Gender and Creation Alliance (GAD Alliance) cited in a recent report that around 80 per cent of rural women business owners have been forced to stop their tiny or cottage business through the pandemic.

In impact assessment conducted by Bangladesh Institute of Creation Analyses (BIDS) revealed that the SME sector’s annual earnings dropped by 67 % in 2020 in comparison to 2019.

Analysts recommend taking special programs for SMEs Safiqul Islam, Managing Director of SME Base, said the ongoing crisis may cause workforce layoff on the SME sector which would cripple the growth of the economy.

Stressing the necessity for special attention, he said usage of credit wholesaling process is a lot required now which may be ensured through right access to the government stimulus package designed for the SMEs.

Dhaka Chamber of Commerce and Sector (DCCI) president Shams Mahmud said SMEs should get the same facilities which now RMG or perhaps non-RMG sectors are enjoying.

Terming the SMEs since an integral driver of economy and key contributor to the GDP and employment, DCCI president explained a new policy ought to be adopted only for the SME sector to ensure that the sector can face the situation.

The ministry of industries has already taken initiatives to produce a digital database for SME entrepreneurs.

Simultaneously, Bangladesh Small and Cottage Industries Corporation (BSCIC) has taken initiatives to establish an online market to assist business owners in the Cottage, Micro, Small and Medium Enterprises (CMSMEs) for marketing their goods.