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The Bangladesh Bank will extend the timeline of the current stimulus package and increase the stimulus for small and medium enterprises to a total of Tk 60,000 crore by 2023 to ensure economic resilience, said BB deputy governor Abu Farah Md Naser.
The initiative will enhance gross domestic product, employment and inclusive development, he said at a virtual dialogue titled ‘Creating Resilient Recovery for Businesses through Enhancing Investment Opportunities: A Case of Southwest Bangladesh’ held on Thursday.
He said that Tk 20,000 crore would be added to the stimulus for the SMEs by 2022 and another Tk 20,000 crore would be added by 2023, he explained.
At the dialogue, experts and bankers proposed that the definition of SMEs should be modified to target cottage, micro and smaller enterprises more effectively.
Business Initiative Leading Development, with the support of the British Council’s PROKAS (Promoting Knowledge for Accountable Systems) programme, organised the dialogue to address the concerns of cottage, micro, and small enterprises from remote regions.
In response to a question regarding the definition of SMEs raised by BB officials, BUILD chief executive officer Ferdaus Ara Begum said that the organisation was now working with the industries ministry to set a definition of cottage, micro, small and medium enterprises that will help to ensure policy priority and support for smaller and vulnerable businesses.
BRAC Bank SME head Syed Abdul Momen said that the definition of the SMEs should be modified to target the cottage, micro and smaller enterprises more effectively.
BUILD chairperson Abul Kasem Khan said that in addition to supply side interventions, the country also needed demand side initiatives to boost income and consumption of ordinary people to ensure dynamism in the economy amid the COVID-19 fallouts.
He requested for social safety bonds for the small entrepreneurs and some tax changes in the tax policy and extensions of tax incentives for large-scale industries to sustain the businesses.
BUILD additional research director Md Tahmid Zami, in a keynote paper, said that around 50 per cent of the total businesses at the BSCIC Industrial Estate located at Mongla were out of operation and only 20 per cent of the workers had been retained in many factories due to the COVID19 shocks.
Finance should be distributed to the cottage, micro and small enterprises without stringent requirements to rescue endangered businesses, he said.
Mongla municipality mayor Sk Abdur Rahman said that the neediest section of the population, including the cottage enterprises, fishermen and the working class, had largely missed the benefits of the package.
He suggested that the banks should provide not only credit but also technical support to ensure that the credit was properly utilised for repayment.
Training and capacity building programme provided by the government at the local level need to be scaled up, he added.
Bangladesh Frozen Foods Exporters Association vice-president S Humayun Kabir requested for a proper insurance policy for the shrimp industry as well as higher incentives such as cash subsidy to ensure better development of the sector.
Cold storage facility for the shrimp and fish sectors should be boosted, he said.
Climate finance of PROKAS programme IBP manager Md Abul Basar urged the stakeholders to create resilient recovery for businesses in the southwestern region of the country.
BB SME and special credits department general manager Husne Ara Shikha and Khulna Chamber of Commerce and Industry director Md Mofidul Islam Tutul, among others, spoke at the dialogue.
