Empowering SMEs for economic growth

Small and Medium Enterprises (SMEs) are the lifeblood of Bangladesh's economy, contributing nearly 25 per cent to the GDP and employing over 7.8 million people. These enterprises play a crucial role in promoting inclusive economic growth, generating employment, encouraging entrepreneurship, and reducing regional disparities. However, despite their importance, SMEs in Bangladesh continue to face numerous structural challenges including limited access to finance, bureaucratic red tape, outdated technology, poor infrastructure, and inadequate business development services.

The COVID-19 pandemic further exposed and amplified these vulnerabilities. Many SMEs were forced to shut down or significantly reduce operations due to supply chain disruptions, reduced demand, and liquidity shortages. While the government did introduce stimulus packages and low-interest loans to cushion the blow, these short-term measures are not enough. Building long-term resilience in the sector will require comprehensive policy reforms and sustained support.

Improving access to affordable financing through SME-friendly banking models and digital financial services is crucial. Simplifying business registration, licensing, and tax procedures can encourage more informal businesses to formalise. Moreover, investment in digital transformation and innovation will help SMEs remain competitive in an increasingly technology-driven marketplace.

Capacity-building programmes focusing on financial literacy, E-commerce, and export readiness can further empower entrepreneurs and open access to regional and global markets. Collaboration among government agencies, private investors, and development partners will be key to creating a supportive ecosystem for SME growth.

As Bangladesh aspires to become an upper-middle-income country by 2031 and a developed nation by 2041, a vibrant and resilient SME sector will be essential to achieving these goals.

Ahmad Hammad Faique

Student

North South University, Dhaka