Executive Summary Small Enterprise means an entity, ideally not a public limited company. The role of Small and Medium Enterprises (SMEs) is indispensable for overall economic development of a country particularly for developing countries like Bangladesh. Since this sector is labor intensive with short gestation period, it is capable of increasing national income as well as rapid employment generation, achieving Millennium Development Goals especially eradication of extreme poverty and hunger, gender equality and women empowerment. SME sector has played a vital role in economic development of some prosperous countries of Asia. Our neighbor countries have also given due importance on SME.
There are lots of sectors of SME in our country by which men and women can change there economic condition. According to economic census and Bangladesh Bureau of Statistics almost 118 percent change occurs in economy till 2013. So, as a least LDC county government should more finance in SME. Bangladesh is highly resourceful with so many natural asset and also agricultural, electronics, automobiles, garments, foods, raw materials, hardware and others products are highly renowned in our country. Taking into account the contribution of those sectors, SMEs account for about three-quarters of total employment in manufacturing.
Bangladesh Bank has already introduced several schemes and programmes to flourish and expand SME Enterprises. Refinance scheme funded by Bangladesh Bank, IDA and ADB has been facilitated for the development of SME Sector. Indeed, higher rate of interest is a major hindrance, but availability of adequate fund is very much important. That is why, Bangladesh Bank is committed to facilitate SME credit through refinance window. We provided a list of tentative problems faced by small businesses to rank them according to their merit as per the entrepreneurs' real experiences. We also provided the problems which are
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high sunk cost for obtaining loan, malpractices in sanctioning loan and lack or managerial capacity.
SMEs will continue to be the major driving force for income and employment generation in Bangladesh. The future for entrepreneurship appears to be very bright. We are living in the age of the entrepreneur, with entrepreneurship endorsed by government, business community, educational institutions, society, and corporations. Financing of SMEs in Bangladesh is the need of the hour to raise the standard of living of the people of our country. The loan application and disbursement procedure of SME is perplexing. Also the financial institutes should develop an official credit-rating system in easier way. Government should take adequate measures to ensure the uninterrupted supply of raw materials for SMEs.
The government should define a secure and pragmatic policy for the development of SMEs in the country. In order to frame a policy for SMEs, data collection needs to be updated. Provision should be made to develop separate and specialized institutions in three areas: (a) finance, (b) technology, and (c) skill development, in addition to rationalizing existing policies and institutions. The concept of public private partnership in the sphere of development and growth of SMEs can also be explored.
The SME sector of Bangladesh need to be widened but depth has to be achieved in true sense. SMEs provide vital linkages to larger enterprises, particularly in the high-growth export sector, and also form part of the core business activities in both rural and urban areas. Bangladesh government should continue to give more focuses on some areas. The SMEs of Bangladesh will get a boost if the suggested measures are implemented.
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