SME financing fair 2009
Wednesday, 6 January 2010
Ferdaus Ara Begum
THE SME Financing Fair 2009, had recently, brought out in full the interest of entrepreneurs, the banks and financial institutions (FIs) in small and medium enterprises (SME). In all twenty six banks, financial institutions and SME supporting organisations took part to offer 130 new and innovative schemes, with attractive packages, to encourage initiative for small and medium enterprises. Entrepreneurs were keen to know how far the products would be supportive of new small and medium enterprises.
The fair created an impression that a full set-up is ready for joint collaborative activities with interested entrepreneurs for new ventures. The fair slogan, financing small and medium enterprises for urban and rural development, created a positive impact throughout the country. Participants came from all corners of the country.
The fair provided entrepreneurs opportunities for match-making as well as one-to-one meetings with officials of different banks/financial institutions.
The Dhaka Chamber of Commerce and Industries (DCCI) and the SME Foundation jointly hosted the fair with the objective of bridging the gap between the needs and availability of funds for new small and medium enterprises. The fair facilitated communication and collaboration between the financiers and the loan-seekers. It provided a forum for the two sides to know each other and even bargain for advantageous terms. It was a platform for the parties to discuss and address their issues, with an open mind. They could probe the ways and means of improving the situation. In all, about 106 interactions took place for many tie-ups of different interests. On the spot agreements were signed between banks and entrepreneurs for investment in small and medium enterprises.
Prime Minister Sheikh Hasina inaugurated the fair, expressing the hope that collaboration between the chamber and the SME Foundation would bring the small and medium entrepreneurs to the mainstream of the economy. The experience, she said, could be a model for the government and the private sector to work together to achieve the goal, set in her vision 2021, for industry to contribute 40 to the gross domestic product (GDP).
The World Bank has committed US$10 million for financing small and medium enterprises in Bangladesh. In all, 28 domestic financiers, 14 of them being banks and many other financial institutions, already financed 2,341 small and medium enterprises. The Prime Minister requested banks and other financing institutions to provide collateral-free credit at rational rates to the sector. She also suggested for making more low interest lending available to SMEs outside Dhaka. Those businesses that are helping to decentralise industrial activities outside Dhaka should have special benefits, for taking the pressure out of Dhaka.
Echoing her, Finance Minister AMA Muhith said by 2021, the contribution of industry to the economy needs to increase to 40 per cent. He suggested that big companies and large firms getting orders from international clients, can subcontract some activities to SMEs, which in turn can access the international market through large entities. Industries in Bangladesh, he suggested, should be spread out to create employment in rural areas. He requested the entrepreneurs to be careful about the environmental impact of their enterprises. The banks and other financiers, he said, should stress bringing in modern technology and human resource training to make business competitive, coping with climate change. He called for better coordination between the entrepreneurs and the financiers. Funding must match local investment requirement, he said, for best possible exploitation of regional resources for product diversification for competitive advantage.
In all, 12 on-the-spot agreements were signed, nine of them in the presence of the Prime Minister. Participants, at a seminar, a part of all fair, called for reforms in policy and regulatory framework to make SME financing more useful. About Taka 10 million was disbursed to projects, mostly located in the remote areas of the country to add credence to the fair slogan.
The Prime Minister's Adviser HT Imam was the chief guest at the session, chaired by former caretaker government adviser Dr. A. B Md. Mirza Azizul Islam. Former Bangladesh Bank governor Dr. Salehuddin Ahmed presented the key-note paper while policy makers, facilitators, bankers and SME entrepreneurs took part in the discussions.
Dr. Salehuddin Ahmed stressed the need for policy and regulatory reforms following holistic approach. In the paper, he discussed how different countries utilised resources in small and medium enterprises for employment generation. It helped them diversify their industries and decentralise development. The current scenario in Bangladesh, he said, calls for an unambiguous definition. The diverse nature of small and medium enterprises, he said, calls for 'calibrated' and not a blanket or omnibus policy and programme. Dr Ahmed identified lengthy and complex lending process, lack of information on SME financing, high rate of borrowing and lack of business advisory services as major problems facing SME entrepreneurs. Inadequate profit, insufficiency of funds, cumbersome credit processing, risks following investment and high supervision costs also act as disincentives, he said.
Information on business matches collected during the fair would benefit all the players. A short survey done by the DCCI provided a closer understanding of entrepreneurs' interests and how the financing institutions respond. Some of the potential investors were keen to gather more information about what small and medium enterprises can provide and the facilities available for such investment. The matchmaking exercises provided insights into SME financing needs. It provided the entrepreneurs the opportunity to speak out their concerns to the lending institutions and the facilitators.
Information collected from the entrepreneurs helped create a computerised database that would benefit potential investors. A list of the entrepreneurs who visited was prepared with their addresses, and the areas where they have invested, the banks from which they borrow and response they get from the lending institutions. Their reactions regarding the fair were also recorded in the database. The database provide inputs that could be useful for policy makers in making new strategy for SMEs. The DCCI is willing to help SME supportive institutions.
The fair brought private and public sectors together to encourage their partnership for a sustained SME development programme, with all the players joining hands for a balanced intra-regional growth and employment creation. The year 2010 ought to see a new beginning of entrepreneurship.
The writer can be reached at: nothing_man2000@yahoo.com
THE SME Financing Fair 2009, had recently, brought out in full the interest of entrepreneurs, the banks and financial institutions (FIs) in small and medium enterprises (SME). In all twenty six banks, financial institutions and SME supporting organisations took part to offer 130 new and innovative schemes, with attractive packages, to encourage initiative for small and medium enterprises. Entrepreneurs were keen to know how far the products would be supportive of new small and medium enterprises.
The fair created an impression that a full set-up is ready for joint collaborative activities with interested entrepreneurs for new ventures. The fair slogan, financing small and medium enterprises for urban and rural development, created a positive impact throughout the country. Participants came from all corners of the country.
The fair provided entrepreneurs opportunities for match-making as well as one-to-one meetings with officials of different banks/financial institutions.
The Dhaka Chamber of Commerce and Industries (DCCI) and the SME Foundation jointly hosted the fair with the objective of bridging the gap between the needs and availability of funds for new small and medium enterprises. The fair facilitated communication and collaboration between the financiers and the loan-seekers. It provided a forum for the two sides to know each other and even bargain for advantageous terms. It was a platform for the parties to discuss and address their issues, with an open mind. They could probe the ways and means of improving the situation. In all, about 106 interactions took place for many tie-ups of different interests. On the spot agreements were signed between banks and entrepreneurs for investment in small and medium enterprises.
Prime Minister Sheikh Hasina inaugurated the fair, expressing the hope that collaboration between the chamber and the SME Foundation would bring the small and medium entrepreneurs to the mainstream of the economy. The experience, she said, could be a model for the government and the private sector to work together to achieve the goal, set in her vision 2021, for industry to contribute 40 to the gross domestic product (GDP).
The World Bank has committed US$10 million for financing small and medium enterprises in Bangladesh. In all, 28 domestic financiers, 14 of them being banks and many other financial institutions, already financed 2,341 small and medium enterprises. The Prime Minister requested banks and other financing institutions to provide collateral-free credit at rational rates to the sector. She also suggested for making more low interest lending available to SMEs outside Dhaka. Those businesses that are helping to decentralise industrial activities outside Dhaka should have special benefits, for taking the pressure out of Dhaka.
Echoing her, Finance Minister AMA Muhith said by 2021, the contribution of industry to the economy needs to increase to 40 per cent. He suggested that big companies and large firms getting orders from international clients, can subcontract some activities to SMEs, which in turn can access the international market through large entities. Industries in Bangladesh, he suggested, should be spread out to create employment in rural areas. He requested the entrepreneurs to be careful about the environmental impact of their enterprises. The banks and other financiers, he said, should stress bringing in modern technology and human resource training to make business competitive, coping with climate change. He called for better coordination between the entrepreneurs and the financiers. Funding must match local investment requirement, he said, for best possible exploitation of regional resources for product diversification for competitive advantage.
In all, 12 on-the-spot agreements were signed, nine of them in the presence of the Prime Minister. Participants, at a seminar, a part of all fair, called for reforms in policy and regulatory framework to make SME financing more useful. About Taka 10 million was disbursed to projects, mostly located in the remote areas of the country to add credence to the fair slogan.
The Prime Minister's Adviser HT Imam was the chief guest at the session, chaired by former caretaker government adviser Dr. A. B Md. Mirza Azizul Islam. Former Bangladesh Bank governor Dr. Salehuddin Ahmed presented the key-note paper while policy makers, facilitators, bankers and SME entrepreneurs took part in the discussions.
Dr. Salehuddin Ahmed stressed the need for policy and regulatory reforms following holistic approach. In the paper, he discussed how different countries utilised resources in small and medium enterprises for employment generation. It helped them diversify their industries and decentralise development. The current scenario in Bangladesh, he said, calls for an unambiguous definition. The diverse nature of small and medium enterprises, he said, calls for 'calibrated' and not a blanket or omnibus policy and programme. Dr Ahmed identified lengthy and complex lending process, lack of information on SME financing, high rate of borrowing and lack of business advisory services as major problems facing SME entrepreneurs. Inadequate profit, insufficiency of funds, cumbersome credit processing, risks following investment and high supervision costs also act as disincentives, he said.
Information on business matches collected during the fair would benefit all the players. A short survey done by the DCCI provided a closer understanding of entrepreneurs' interests and how the financing institutions respond. Some of the potential investors were keen to gather more information about what small and medium enterprises can provide and the facilities available for such investment. The matchmaking exercises provided insights into SME financing needs. It provided the entrepreneurs the opportunity to speak out their concerns to the lending institutions and the facilitators.
Information collected from the entrepreneurs helped create a computerised database that would benefit potential investors. A list of the entrepreneurs who visited was prepared with their addresses, and the areas where they have invested, the banks from which they borrow and response they get from the lending institutions. Their reactions regarding the fair were also recorded in the database. The database provide inputs that could be useful for policy makers in making new strategy for SMEs. The DCCI is willing to help SME supportive institutions.
The fair brought private and public sectors together to encourage their partnership for a sustained SME development programme, with all the players joining hands for a balanced intra-regional growth and employment creation. The year 2010 ought to see a new beginning of entrepreneurship.
The writer can be reached at: nothing_man2000@yahoo.com