Half of SMEs pay bribe for essential services: study

More than half of the small industries in Bangladesh have to pay bribes for obtaining essential services, including availing and renewing licences, using public utilities such as gas and power, obtaining a tax identification number, and value-added tax certificates, according to a study.

The Center for Governance Studies (CGS), in partnership with the Center for International Business Enterprise, carried out the study between mid-October and mid-December in 2021 to know the status of small-and-medium enterprises (SME) in Bangladesh, the CGS said in a press release yesterday.

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The survey was conducted among 800 SMEs with an evenly matched number from the manufacturing and service sectors.

In terms of perception, almost nine out of ten SMEs believe corruption is pervasive in the SME sector, the CGS said.

Some 62.4 per cent believe that corruption is well-rooted in the system, and an even higher number at 71.3 per cent believe that resorting to corruption can increase market competitiveness.

More than half of the respondents believe that restrictive government regulations encourage corruption, and this opinion is especially prevalent among smaller businesses.

Because of these perceptions, 61 per cent of the surveyed SMEs choose to bypass regulations and operate informally, it added.

According to the majority of respondents, the desire for money or possessions as well as a lack of transparency at the higher government level inspires this systemic corruption but they also listed a slew of other contributing causes.

And despite the prevalence of corruption, enthusiasm for submitting complaints to authorities remains low.