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On the other hand, 11% firms did not require any support
In enhancing recovery capacity from the economic fallout of the Covid-19 pandemic, 75% of the country’s micro, small and medium enterprises sought loans with subsidized interest rates.
On the other hand, 63% firms preferred financial support for more than a year after the pandemic.
The findings were revealed on Tuesday from a survey titled “Business Pulse Survey: Impact of Covid-19 on MSMEs in Bangladesh.”
The IFC and the World Bank, in partnership with the UK’s Foreign, Commonwealth and Development Office (FCDO), carried out the survey between June and August earlier this year, on more than 500 micro, small and medium enterprises (MSMEs) across the country.
As per the survey findings, in rebounding to normal from the pandemic, 59% business people needed low interest rate financing, 24% needed long-term financing facilities, 4% demanded more credit than existing and 2% wanted additional financing through risk sharing facilities.
On the other hand, 11% firms did not require any support.
“Cash transfer, access to new credit, and loans with subsidized interest rates is the preferred combination of most-needed policies from the MSMEs for the revival of the business as 91% of firms were affected by decrease in cash flow,” said the survey report.
In terms of repaying existing loans, only 24% of firms reported that they would be able to continue paying their equated monthly installments (EMI) on a regular basis, while 33% reported they were unable to pay installments and 43% unable to pay regularly.
Further, more than 90% of the surveyed MSMEs reported a decrease in their cash-flow availability during the 30 days before the date of the survey, it added.
Cash transfers and access to new credit and loans with subsidized interest rates were the top two initiatives in the perception of the firms surveyed, the survey said.
“We are working hard to bring the economy back to its normal stage,” said Bangladesh Bank governor Fazle Kabir, who joined virtually as chief guest.
“The government has announced a stimulus package of Tk20,000 crore for MSMEs. We are committed to implementing the stimulus packages and have instructed banks to provide loans to the enterprises at subsidized interest rates,” he remarked.
“We also asked banks not to classify the businesspeople who are unable to pay as well,” he added.
To recover from this crisis, cash transfer, access to new credit, and loans with subsidized interest rates were stated as the top three most-needed policy supports. Only 2% of surveyed firms received some kind of government support since the Covid-19 outbreak.
A majority of firms cited lack of awareness about government policy measures as the reason for not availing any public support.
As per the findings, 61% were not aware of the government support, 14% applied but did not receive any, 10% found it too difficult to apply and 5% were ineligible.
“Majority of the medium-sized firms preferred deferral of rent and deferral of credit payments as the needed policy options, while micro and small firms both preferred cash transfers,” said Ananya Wahid Kader, senior operations officer, IFC, in her keynote presentation.
(DT)
