Bangladesh has over 1.1 million 'micro-merchants' engaged in fast-moving consumer goods (FMCG) trade with estimated annual sales of over US$ 18.35 billion a year, according to a study conducted by the United Nations Capital Development Fund (UNCDF).
According to the National Industrial Policy 2016, micro-enterprises will be those which employ maximum 15 persons and/or have assets worth less than Tk 1.00 million, excluding land and buildings.
However, they have the credit demand for over $ 6.0 billion a year despite the fact that they have a very limited access to finance, the study said.
The demography is that 49.3 per cent youths are 'micro-merchants' with 65 per cent of them having secondary level education or above.
The merchant market consists of 1.7 per cent females with a total of 1.9 million people involved.
The research which was completed in March last said throughout all sub-groups of merchant markets, adequate access to finance is the biggest challenge -- over 90 per cent.
It said 30 per cent of all micro-merchants (MMs) have mobile financial services accounts. Even among the poorest MMs, 25 per cent have MFS accounts.
While exploring main barriers to payments to suppliers through MFS by the merchants, it was found that suppliers do not want to accept payments through MFS (31 per cent), followed by the fee being too high (21 per cent)
Some 65 per cent have had credit transactions with suppliers in last three months.
Women micro-merchants have a much bigger say, in comparison to women in non-women- led micro-merchant enterprises, in small and large purchases in their household which indicates their economic empowerment.
On the other hand, Bangladesh Dokan Malik Samity, a platform of retailers of the country, said the actual number of micro-merchants will be much higher than estimated in the study.
Md Helal Uddin, president of Bangladesh Dokan Malik Samity, claimed that there are over 2.4 million merchant members in the country.
But the study carried out on micro-merchants focused on the FMCG trading only.
Mr Helal said the micro-merchants need to be cared of as they have been missing out due to aggressive marketing by big corporates.
Everything is written in English, he said, adding: "How will the micro-merchants understand the questionnaire?"
In the meantime, the UNCDF has held discussion meetings with leading consumer food groups on how to provide efficient services to the micro-merchants in terms of supplying goods to them.
PRAN, an agro-processing company, said digitising the supply chain may be difficult for the micro- merchants since they refer visiting outlets and picking their merchandising personally.
Bank Asia, a private commercial bank, said union digital centres across Bangladesh will become agent banking points and currently there is no limit on loans given to them -- this can become a way of reaching the underserved.
SureCash, an MFS, said 10-15 per cent of micro-merchants are already working with them.
"We are working with 80,000 villagers and 10 million mothers across Bangladesh," SureCash said.
The MFS said it has been providing the client with stipends through digital wallets which can be leveraged and used for other types of payments as well.
"We are working with MFIs to digitise our transactions."
UNCDF (United Nations Capital Development Fund) provides investment capital and technical support to both public and private sectors.
It offers capital financing in the form of grants, soft loans and credit enhancement and technical expertise to unleash sustainable financing at grassroots level.
jasimharoon@yahoo.com