Help small businesses fight pandemic blues

Private sector entities should help micro enterprises recover from the Covid-induced economic downturn through their corporate social responsibility (CSR) projects and by mobilising resources to this end, according to experts.

Corporations also have the ability to provide economic rehabilitation. For example, they could help survivors of human trafficking reintergrate into the economy by offering them a place to work or credit to start a business.

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These comments came at a webinar on "Micro Enterprises in the post pandemic economy of Bangladesh: Navigating through the challenges to achieve sustainability", held yesterday. The event was jointly organised by The Daily Star in association with CSR Centre and Ashshash project, an initiative of the Swiss Agency for Development and Cooperation being implemented by Winrock International in Bangladesh.

The four-year Ashshash project which began in 2018 works in partnership with public and private-sector service providers to deliver counseling, legal services and economic empowerment support to men and women who have escaped trafficking.

"We should find the way to bring micro enterprises into true entrepreneurship and equip them to do better in the post-pandemic era," said Ferdaus Ara Begum, chief executive officer of Business Initiative Leading Development (BULD).

She went on to say that it is important for micro enterprises to build partnerships with other stakeholders and engage the corporate sector to play an active role in their development.

The speakers also discussed how many micro-entrepreneurs, especially women, are unwilling to approach banks and other financial institutions for loans or other services due to the multifarious complications associated with such processes.

The key challenge is the loan-eligibility criteria and most micro-entrepreneurs are found ineligible to receive funds in this regard as they do not meet certain conditions, Begum said.

"So, the need for flexible regulations and smoother processes through continued policy-advocacy were also highlighted to bridge the gaps between private sector organisations and government policymakers," she added.

Muntasir Hossain, head of social impact at Grameenphone, said that by using digital tools, micro-entrepreneurs can be brought under the umbrella of support and development by transforming the ecosystem of micro enterprises and tapping into the increasingly efficient cyber-spaces.

"Grameenphone with help of non-government and government agencies could play a role in combatting human trafficking in the country but we want to do it in compliance with privacy rules," he added.

Mohammed Zahidullah, head of sustainability at DBL Group, said micro enterprises could sell their products through the group's "fair price" shop so that they are able to get a good value for their products.

Saba El Kabir, manager of corporate affairs and brand marketing at Standard Chartered Bank Bangladesh, highlighted the need to forge win-win scenarios with banks and micro-finance institutions for the provision of support to micro-entrepreneurs at scale, and in a speedy manner.

Naimul Hasan Khan, vice president and unit head at the SME banking division of Mutual Trust Bank, said lenders could help human trafficking survivors by allocating money from CSR funds.

"And the other way for banks to help them is by providing loans. They need to be trained and brought into a bankable stage though to mitigate the risk factor in providing them loans," Khan added.

Syed Abdul Momen, deputy managing director and head of SME at BRAC Bank, reiterated the need to tap into digital or cyber-spaces to ensure the provision of various financial and business-setup services.

He proposed the development of a digital platform that could facilitate small loans without the complications of multiple signatories.

Saad Omar Fahim, secretary general of the Swiss-Bangladesh Chamber of Commerce, proposed the development of a module in collaboration with the Ashshash project to effectively address and overcome gaps in the provision of financial support to micro-entrepreneurs in particularly vulnerable communities.

Mirza Nurul Ghani Shovon, president of the National Association of Small and Cottage Industries of Bangladesh, said 25 per cent of micro-entrepreneurs in the country are women, and therefore, women empowerment should be at the forefront of developing micro, small-and medium enterprises.

He recommended that banks and mobile financial institutions should review certain policies centered on the provision of loans. Shovon further emphasised on the need to upgrade technological mediums to provide support-services for micro-entrepreneurs.

Dipta Rakshit, team leader of the Ashshash project, said the business of micro-entrepreneurs got stuck due to the ongoing coronavirus pandemic.

As such, many of them have left their businesses after failing to meet various costs, such as utility bills and loan installments.

"But if the private sector supports them with CSR activities, they can move ahead," Rakshit said.

Another key problem is facilitating loans in the absence of trade licenses, against which the panelists proposed a policy-reform centered on the provision of loans capped for micro-entrepreneurs without trade licenses.

Ashraful Islam, private sector engagement manager of the Ashshash project, also spoke at the event.