Shaking the tree

FE Team | Published: March 28, 2010 00:00:00 | Updated: February 01, 2018 00:00:00

Mahmudur Rahman
The newspaper and television headlines never suggest so; television talk shows rarely find the subject worth a discussion but any economist will swear that the future of the economy lies in the nurturing and encouragement of small businesses.
Bangladesh Bank Governor Atiur Rahman has proved that government employees, with all their limitations, un-balanced pay and facilities can make a difference to society provided they have the attitude. The revolutionary and innovative loan facility extended to marginal farmers for boosting agricultural production has broken the back of the decades old stigma of not loaning without collateral. The step was revolutionary in more ways than one.
Having proved his point, the Governor has thankfully forced the agenda of special attention to small and medium enterprise (SME) loans through opening of exclusive branches for banks, overriding another age old barrier of time consuming permission. All of a sudden there is a mad rush of banks falling over each other in searching for premises through which to service and woo SME clients. And frankly it was somewhat amusing to watch senior bankers clutching their foreheads, their faces betraying a dumbness of disbelief as the Governor waded in to goad them into identifying small businesses throughout the country that they should finance.
His personally driven example had taken away their most potent defense; that of an absence of a reliable mechanism of recovering loans and dealing with bad debt. And even the head of the bankers' association admitted there was merit in the idea, provided the collateral and recovery issues could be addressed through some means. Private banks do have a point. They operate on depositors' money unlike the Bangladesh Bank that has access to public funds. But the well placed bankers must possess special qualities in innovativeness and efficiency (otherwise why would they be employed in such positions) to be able to come up with solutions to such challenges.
Too often, the problem of bad debts and such emerge. In almost every case the fault lies with the loanee not being able to repay loans. This itself gives rise to the safety barriers in place for such eventualities. When is the time to pull the plug on a bad debt and is rescheduling the answer? That is a luxury that the simple farmer or the small businessman can never even hope to enjoy. Micro-credit organizations, for all the controversies surrounding then about their lending rates have shown the way in terms of realizing loans so there is documented learning to glean from.
Small businesses by and large never dare to step in to the brightly decorated branches, mainly because they don't understand the process; are often not literate enough to read the large, forget the fine print of cumbersome loan papers; and because they feel safer borrowing from friends and family and at times money-lenders. Fancy advertising and glitzy brochures won't work on them. For a change the smart, suited and attired bankers will have to take the trouble of stepping out of air-conditioned comfort and brave the heat, dust and mud. It is they who will have to woo the client at their doorsteps no matter how scruffy they are.
Mahatma Gandhi was succinct in his description of the customer: "A customer is the most important visitor on our premises; he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so".
There's just one slight change in today's world. The customer won't come to you. You have to go to him. (The writer is a former Head of Corporate & Regulatory Affairs of British American Tobacco Bangladesh, former Chief Executive Officer of Bangladesh Cricket Board and specializes in corporate affairs, communications and corporate social responsibility. He may be reached at e-mail: mahmudrahman@gmail.com)