SMEs in need of 2nd stimulus

Businessmen and academicians on Saturday said the local small and medium enterprises (SMEs), battered by the Covid pandemic, deserved increased official support.
They felt that the government should introduce a second stimulus package for the most-affected sectors, including the SMEs.
Financial assistance to SMEs is a matter of sustainability which is not the case for large businesses, the speakers maintained.
They said the procedures involving stimulus packages need to be simplified.
The speakers said most of the researches and studies show SMEs did not get benefits from the packages that are in place. So, the government should recalibrate the same.

The experts made the observations while talking part in a webinar hosted by South Asian Network on Economic Modeling (SANEM) to publish the survey results.
The SANEM in alliance with The Asia Foundation unveiled the findings of their survey styled, 'Covid-19 and Business Confidence in Bangladesh: Towards Economic Recovery'.
The second round of this survey was done on 502 firms countrywide in October. Some 252 of them were involved in manufacturing and 250 service providers.
The businesses are categorised into micro, small, medium and large as per their sizes.
The findings show the SME sector has been struggling to access finance from the government's stimulus packages.
The report said 72 per cent of the firms surveyed are yet to receive any aid from any package.
However, the first round of the survey in July found that 55 per cent firms were yet to receive any funds.
According to the latest survey, only 8.0-per cent micro and small firms, 20-per cent medium and 41-per cent large firms received funds.
Around 71 per cent of the firms believe Bangladesh is already on its road to economic recovery from the Covid-19 fallout, said SANEM executive director Selim Raihan in his presentation.
"…Only 4.0-per cent firms consider it as a strong recovery and 41 per cent and 26 per cent think it as moderate and weak recovery respectively."
The sectors recovering faster include RMG, textile, drugs, food processing, retail, restaurants, financing sector, and information and communication technology.
The SANEM ED said the sectors recovering slowly include leather, light engineering, wholesale, transport and real estate. "The sectors are experiencing recovery at different paces."
The survey also finds that major areas of challenges for the surveyed firms include a lack of package, lengthy procedure, difficulty in bank-related services and difficulty in accessing information.
The respondents identified corruption, lack of trade logistics and management of COVID-19 crisis as the top three challenges for doing business or unfavourable in the current situation.
Business confidence for the October-December period shows some improvement in business confidence during the April-June period of this year.
Policy Research Institute executive director Dr Ahsan H Mansur said the economy is recovering from the pandemic shock. It is still a long way to go to be in the normal situation, he added.
The recovery has not reached a level where unemployed workforce would get back their jobs and new entrants into the job market will get employment, he observed.
Dr Mansur said quarter-to-quarter recovery results are optimistic, but if the situation is compared to last year's same period, the economy is still on the ground.
He urged the government to think over a second stimulus package that particularly focuses on SMEs.
The experts said large firms have many sources, even foreign source of funds, but only SMEs need funds now.
"We need to recalibrate and need to think about a sector-focused second stimulus package," he opined.
Policy Exchange chairman Masrur Riaz said economy has survived but it still has a long way to go to return to normalcy.
"Rural economy needs to be boosted for micro, cottage and small businesses," he remarked.
AK Khan Telecom managing director Abul Kashem Khan said SMEs need financial assistance for survival during this pandemic.
Chattogram Stock Exchange chairman Asif Ibrahim said SMEs form an crucial part of supply chain and their proper functioning is vital for economic recovery.
One of the key decisions that helped the economy to weather through the pandemic was the gradual reopening of the export-oriented sectors, he mentioned.
Shohoz founder Maliha M Quadir urged the government to provide financial assistance to the Covid-hit startups.
[email protected]