SME Foundation seeks Tk 200cr to form fund for rural women entrepreneurs

SME Foundation has sought Tk 200 crore from the government "to form a fund" to give out loans to small and medium enterprises (SMEs) owned by rural women for enabling continuation of operations and even expansions amidst the pandemic's fallout.

The fund's modus operandi will be decided once it is available, said SME Foundation's Managing Director Md Mafizur Rahman who sought the allocation through a letter to the Ministry of Industries on March 6.

"The foundation already distributed Tk 300 crore among entrepreneurs from the stimulus package announced by the government about five months ahead of schedule," said Rahman.

The government has till date allocated Tk 40,000 crore in two phases of equal amounts in a dedicated stimulus package for the disbursement of loans among cottage, micro, small and medium enterprises.

Bangladesh Bank unveiled the first round worth Tk 20,000 crore in April 2020. Of the sum, 77 per cent was disbursed. Its tenure expired in June last year.

The BB allocated another Tk 20,000 crore for the current fiscal year. So far, only 39 per cent of it has been disbursed between July 1 and March 10 this fiscal year, according to data from the central bank.

According to the letter, the government allocated Tk 300 crore from the stimulus fund in favour of SME Foundation.

In fiscal year 2020-21, the foundation enabled 925 entrepreneurs to receive Tk 100 crore and in fiscal year 2021-22 another 2,183 Tk 200 crore.

Among the recipients, 736 were women entrepreneurs.

At least 80 per cent of cottage, micro and SMEs were affected by the pandemic, according to Md Ali Zaman, president of the SME Owners Association of Bangladesh.

There is no official data on the number of CMSMEs in Bangladesh.

The last time a survey was carried out was back in 2013, when the total number of SMEs, excluding cottage and micro enterprises of which there are hundreds and thousands, was 79 lakh.

The sector contributed at least 25 per cent to Bangladesh's gross domestic product and generated as much as 90 per cent of the private sector jobs.

Last year in an event, Dhaka Chamber of Commerce and Industry President Rizwan Rahman said local industrialisation must be emphasised to achieve the export target of $40 billion by 2030.

The cottage, micro and SMEs can add value to the local industry, he said, suggesting creating a specialised bank or fund to help SMEs recover from the pandemic-induced losses alongside formulating an act enabling their development.