SMEs urged to raise funds thru' bonds
Thursday, 4 December 2008
FE Report
Chief Executive Officer of Dhaka Stock Exchange (DSE) Salahuddin Ahmed Wednesday urged the SMEs to raise funds through bonds as it is much easier and cost effective than borrowing from formal financial institutions.
He was addressing a seminar on world economic crisis and SME sector in Bangladesh, organised by SME owners Association of Bangladesh (SOAB) at a city conference room.
The meeting, among others, was attended by Md Serazul Islam, secretary to to the president's secretariat, M Kamal Uddin Ahmed, director of the institute of appropriate technology and deputy general manager of Janata Bank Md Afzalul Bashar
"SMEs does not have easy access to finance, so issuing of bonds with proper rules and regulation is an easy approach for you (SMEs)," said Salahuddin.
"I carried out a study in early 1990s on the problems faced by SMEs in securing bank loans and found that the enterprises needs to pay bribe and provide collateral which they cannot offer and thus fail to receive the loans," he added.
However, leaders of the SOAB said the future of the bond market in the country is not encouraging and the capital markets as well as the SEC have many thing to do to ensure a better position for the bond market.
Mr Salauddin said that his bourse has sent a proposal to the Securities and Exchange Commission (SEC) regarding two stage trading system - one for small industries and one for large companies to encourage small and medium industries.
"We have sent the proposal to the SEC and once it is implemented many small companies will get chance to the capital market and help graduation of the companies into large companies," he added.
SEC chief also said Bangladesh's agricultural sector cannot absorb increased manpower mainly because of fast dwindling agricultural lands adding "millions of people might be hired by the SMEs"
Secretary to the president's office at the meeting said Bangladesh must go into production sector to survive in the ongoing financial crisis.
Chief Executive Officer of Dhaka Stock Exchange (DSE) Salahuddin Ahmed Wednesday urged the SMEs to raise funds through bonds as it is much easier and cost effective than borrowing from formal financial institutions.
He was addressing a seminar on world economic crisis and SME sector in Bangladesh, organised by SME owners Association of Bangladesh (SOAB) at a city conference room.
The meeting, among others, was attended by Md Serazul Islam, secretary to to the president's secretariat, M Kamal Uddin Ahmed, director of the institute of appropriate technology and deputy general manager of Janata Bank Md Afzalul Bashar
"SMEs does not have easy access to finance, so issuing of bonds with proper rules and regulation is an easy approach for you (SMEs)," said Salahuddin.
"I carried out a study in early 1990s on the problems faced by SMEs in securing bank loans and found that the enterprises needs to pay bribe and provide collateral which they cannot offer and thus fail to receive the loans," he added.
However, leaders of the SOAB said the future of the bond market in the country is not encouraging and the capital markets as well as the SEC have many thing to do to ensure a better position for the bond market.
Mr Salauddin said that his bourse has sent a proposal to the Securities and Exchange Commission (SEC) regarding two stage trading system - one for small industries and one for large companies to encourage small and medium industries.
"We have sent the proposal to the SEC and once it is implemented many small companies will get chance to the capital market and help graduation of the companies into large companies," he added.
SEC chief also said Bangladesh's agricultural sector cannot absorb increased manpower mainly because of fast dwindling agricultural lands adding "millions of people might be hired by the SMEs"
Secretary to the president's office at the meeting said Bangladesh must go into production sector to survive in the ongoing financial crisis.