Old Dhaka’s small businesses demand speedy disbursement of stimulus funds
Businesses in Good old Dhaka yesterday demanded speedy disbursement of the government-announced stimulus package for cottage, micro, compact and medium enterprises (CMSMEs).
These entities, a large number of which are located in Old Dhaka, have already been struggling to survive about being badly impacted amid the Covid-19 fallouts.
The require came at a virtual getting together with organised by the Dhaka Chamber of Commerce and Industry (DCCI) on the existing situation of Old Dhaka's businesses.
Some 13 million CMSMEs take into account 25 per cent of Bangladesh's GDP and 35.5 per cent of total employment, said Shams Mahmud, the DCCI president, while moderating the event.
Their contribution to export revenue also range from 75 per cent to 80 % however the sector has been hit hard by simply the pandemic while banks are reluctant to disburse loans from the stimulus offer.
The CMSMEs sometimes face challenges in usage of finance, industry linkage, product standardisation, modern technology and training and for a lack of skilled manpower, according to a statement from the DCCI.
Small entrepreneurs even so want to pay VAT and tax nevertheless they want to avail instalment facility to handle losses, said Mahmud. "In addition, we need to determine alternative sources of financing besides banking institutions," he said.
The DCCI plans to sit with the banking institutions to try to figure out the procedures SMEs have to take to qualify for bank loans from the stimulus package, informed Mahmud.
He also urged the federal government to announce 2021 due to the entire year of the CMSMEs sector. "We want to arrive out of this situation. We are in need of SME linked FDI plans to create CMSME sector grow even more," he added.
Small enterprises come together to create a major conglomerate and large companies are mostly dependent on SMEs, said Hossain Khaled, managing director of the Anwar Band of Industries.
"We need to create occupations as it is definitely the key concern now in a good country like Bangladesh. Because of the Covid-19 pandemic our sales have come down by 35 %, that will have negative ripple results," he said.
Unbanked SMEs might not be able to take advantage of the stimulus, that is a challenge, he said. "We must bring the unbanked entrepreneurs in the banking channel," he added.
Terming Good old Dhaka the centre of business, he said minimizing the cost of carrying out business was necessary for survival at the moment. Making 25 % of the government's e-procurements from CMSMEs should be built mandatory, he emphasised.
"Our developing sector is more often than not import based, Khaled said, underscoring the need for easing complex types of procedures of import.
In this crisis, SME Base now should be more vigorous and Bangladesh Bank may introduce a refinancing scheme with a 1.5 per cent to 2 % interest for the SME sector, he said.
"We were not in a position to sell any item during this time period of pandemic," explained Md Alauddin Malik, president of Neighborhood Garments Manufacturers Association.
"This sector possesses been struck hard. We are as well not getting adequate support from banking institutions to get bank loan from the stimulus bundle." Dyeing and embroidery dealers are linked with this sector hence they also need financial aid, he said.
Because of unbearable traffic congestion, Outdated Dhaka is losing buyers daily, he added, requesting to make shops remain wide open till 8:00pm instead of 7:00pm.
There are 120 industrial units in Keraniganj BSCIC commercial area and closures prompted many employees to go back home, almost all of whom are yet another, said Hossain A Sikder, president of Dhaka Shilpa Malik Samity.
Some 80 % of export-oriented industrial products in the BSCIC area are closed because of too little demand, he said.
Furthermore returnee migrants will set strain on the existing unemployed workforce. At this time, financial support from the banking institutions will help convenience the crisis, he added.
Md Abdur Razzaque, president of Bangladesh Engineering Sector Owners' Association, requested the government to defer VAT and electricity expenses payments for a calendar year. This association represents 40,000 members.
He also known as for waiving VAT on locally made capital machinery and businesses providing fixing services. Apart from fiscal support, a few non-fiscal assistances may also help SMEs, he added.
The majority of the CMSMEs found in Old Dhaka don't have lender accounts, said Mohammad Jalal Uddin, president of the Bangladesh Bread Biscuit and Confectionery Makers Association. He said 95 per cent of SMEs were great borrowers and successfully repaid their loans.
He called after banks to give loans to CMSMEs without lender accounts based on recommendations of the respective organization bodies. There happen to be 5,000 bakeries in Bangladesh out which only 270 are functioning.
Without fiscal assistance, tiny industries in Old Dhaka will face a large problem, he said.
Jalal informed that 1,000 bakeries found in Dhaka generated occupation for 2 lakh persons.
The primary problem in Old Dhaka is traffic congestion, he added. He as well requested the government to permit CMSMEs to pay all bills through equivalent instalments within the next six months.
Most of the CMSMEs cannot fulfil most requirements of banking institutions, said Md Golam Mawla, president of Bangladesh Edible Essential oil Wholesalers Association. He as well said entrepreneurs of this sector were but to acquire fiscal support from banking institutions.
Entrepreneurs engaged in making consumer items need large investments and they also need financial support at the moment, he said.
