Industries ministry has initiated framing the National SME Policy 2025, aiming to boost the contribution of small and medium enterprises (SMEs) to GDP to 35 per cent by 2030 from the current 27 per cent.
The 2019 policy is the last such guideline for the SME sector.
The implementation of the latest policy concluded last June, with no government funding allocated to meet the demand for approximately Tk 105 billion to support the sector.
The observations were made at a workshop styled 'SME Policy-2025: Opportunities and Challenges, and the Role of Media' hosted by the SME Foundation in collaboration with the Economic Reporters' Federation (ERF) in ERF Auditorium on Wednesday.
SME Foundation chairperson Md Mushfiqur Rahman attended the event as the chief guest with ERF president Doulot Akter Mala in the chair.
Anwar Hossain Chowdhury, managing director of the SME Foundation, and Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), spoke as special guest.
Speakers say data shortage, lack of financing, high interest rates, informal operations and limitations in marketing are challenges for the SME sector. Proper execution of the new policy will help boost the sector.
They also highlight that while SME's contribution to GDP in Bangladesh is about 27 per cent, it stands at 40 per cent in Pakistan, 52 per cent in Sri Lanka, 60 per cent in China and 37 per cent in India.
However, they called for implementing the new policy by boosting funds of the SME Foundation and facilitating regular meetings and decisions by committees like the National SME Development Council (NSDC) and the SME Task Force.
The workshop, moderated by ERF secretary Abul Kashem, featured a keynote address by SME Foundation general manager Mohammad Jahangir Hossain.
According to the keynote, only three out of the 10 projected meetings of the NSDC were held under the chairmanship of the then industries minister, during the implementation of the last policy.
On the other hand, only six of the 20 meetings of the National SME Task Force under the industries secretary took place.
With no funds allocated despite a demand for Tk 105.13 billion for the development of the sector, two business incubation centres were established in Dhaka and Chittagong with the Asian Development Bank's support.
A national SME training institute was set up in Agargaon, Dhaka, a national SME e-database was created and operated with own funding, and a development project proposal of Tk 229.5 million was prepared and sent to the Planning Commission, said Mr Hossain.
He said the proposed policy has 83 strategic tools and 310 activities under 10 strategic goals for the development of the SME sector.
To implement this policy, it is necessary to organise regular meetings, allocate funds, monitor the execution process, establish an office of the Foundation outside Dhaka, and strengthen the entity financially.
SME Foundation chair Mushfiq said like in many countries, the cottage, micro, small and medium enterprise (CMSME) sector is vital to Bangladesh's economy, accounting for 85 per cent employment of the industrial sector.
The Foundation has been instrumental in advancing government policies and strategies to foster the sector's growth, organising 11 national and 91 regional SME product fairs, four heritage handloom festivals, and supporting over 200 entrepreneurs at international fairs.
It has established the first-ever common facility centre at Kaluhati Footwear Cluster in Rajshahi and facilitated more than Tk 10 billion in loans for around 10,000 entrepreneurs through its credit wholesaling programme.
Meanwhile, Mr Anwar highlighted that the poor contribution of Bangladesh's CMSME sector to GDP compared to neighbouring countries.
Referring to the economic census of the BBS conducted in 2013, he said there were more than 7.81 million CMSME entrepreneurs in the country.
Since its establishment in 2007, the SME Foundation has helped around 2.0-million entrepreneurs. Despite the 2019 SME Policy, the lack of funding forced it to implement programmes with its own resources.
Taskin Ahmed highlighted financing, high interest rates, informal operations, and marketing challenges in the SME sector, and thus sought solutions.
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