Stress on speedy disbursement of stimulus for CMSMEs

Staff Correspondent

6th June, 2021 09:11:58 PM printer

Stress on speedy disbursement of stimulus for CMSMEs

Speakers at a webinar on Sunday stressed the need for putting more attention to the Cottage, Micro, Small and Medium Enterprises (CMSMEs) as well as ensuring a speedy distribution of funds from the stimulus packages to ensure their sustainable recovery from COVID-19 pandemic.

They also emphasised expanding and making flexible the credit guaranty scheme so that the entrepreneurs could maximize their benefits, developing alternate source or mechanism apart from the banking system for distributing stimulus funds towards the CMSMEs so that the unbanked entrepreneurs could get the benefits and further supporting the CMSMEs to boost their exports.

They came up with such views at a webinar on "Impact of Covid-19 on CMSMEs and Understanding their Recovery: Evidence from BSCIC Industrial Estates" organized jointly by Economic Reporters’ Forum (ERF) and PRISM Programme.

Industries Minister Nurul Majid Mahmud Humayun joined the webinar as the chief guest.  

Ambassador and the Head of Delegation of the European Union (EU) to Bangladesh RensjeTeerink, Industries Ministry Additional Secretary GolamYahia, Chairman of the Bangladesh Small and Cottage Industries Corporation (BSCIC) Md. Mostaque Hassan joined the virtual event as special guests.

Former Governor of Bangladesh Bank Dr. Atiur Rahman, President of Dhaka Chamber of Commerce and Industry (DCCI) Rizwan Rahman, Chairman and CEO of PRAN-RFL Group Ahsan Khan Chowdhury and Chairperson of Business Initiative Leading Development (BUILD) AbulKasem Khan attended the webinar as panel discussants.

Research Director of BIDS, and senior consultants of PRISM project Dr. Monzur Hossain presented the keynote paper in the webinar.

Dr Monzur Hossain in his presentation highlighted that 96 percent of firms were affected during the lockdown while the CMSMEs recovered up to 80 percent of their production by December last year.

Team Leader, Technical Assistance to BSCIC- PRISM Programme Ali Sabet gave the welcome remarks.

ERF President Sharmeen Rinvy chaired the event while General Secretary S M Rashidul Islam moderated the discussions. 

The industries minister said the CMSMEs are one of the most affected sectors by the pandemic and the government had rightly announced Tk 200 billion stimulus package for these enterprises.

He also said another Tk 15 billion stimulus package had been announced so that the entrepreneurs in the rural areas could benefit from the government’s support. Out of the that amount, Humayun said Tk 3.0 billion has been allocated for the SME Foundation which will distribute Tk 1 billion in the outgoing fiscal year and Tk 2 billion in the fiscal year 2021-22.

Mentioning that there is no alternative to expanding the CMSMEs, he said CMSMEs are playing an important role to boost the country's GDP growth through increasing export earnings and creating employment. 

The industries minister said that optimum utilization of the stimulus packages have to be ensured in an innovative way through extending support to the concerned stakeholders.

Ambassador and the Head of Delegation of the European Union to Bangladesh RensjeTeerink lauded the prompt response from the government of Bangladesh when the pandemic hit the country. "The government responded very swiftly to the pandemic."

She said it is instrumental to scaling, upscaling and rescaling of the workforce of the enterprises in the country to get better outcome. She also opined that a comprehensive unique social protection system should be put in place.

The EU Ambassador also mentioned about the allocation of 130 million Euro budget support to the government.

Industries Ministry Additional Secretary GolamYahia said that the CMSMEs are playing a big role in industrialization while Bangladesh would turn into a developed nation by 2041 through successful implementation of the SME Policy.

BSCIC Chairman Md Mostaque Hassan highlighted various initiatives of BSCIC to support the cottage, micro and small industries, saying that the factories in countrywide BSCIC industrial estates remained in operation braving the pandemic situation.

He said that the BSCIC has developed time-befitting training programmes, and their online service will be inaugurated on June 13, online marketing will be launched soon while a master plan has been taken to support export diversification.

Former Bangladesh Bank Governor Dr Atiur Rahman said the government would have to think about rolling out the 2nd round of stimulus packages for the affected industries before the first round of the stimulus packages ends. 

He said that the rules and regulations of the central bank as well as its credit guaranty scheme should be more simplified. 

Drawing the attention of the industries minister, Dr Atiur said the BSCIC industrial estates could be turned into state of the art ones where modern facilities, available in the special economic zones, could be replicated there.

He also advocated for providing special stimulus or fund from the budget to those affected enterprises in the districts like Khulna, Satkhira, Natore where lockdown is being enforced to rein in the COVID-19 infection rate. 

The former Bangladesh Bank Governor said BSCIC should act like a "midwife" and develop a value chain, put attention on diversification of markets, sourcing of raw materials.

He said that the CMSMEs can play a very important role in the "Green Recovery". "Bangladesh is a success story and it will continue to be one of the success stories."

Dr Atiur also termed the proposed budget for FY22 as business-friendly and people-friendly.

Chairperson of BUILD Abul Kasem Khan stressed the need for addressing the barriers in availing support from the stimulus packages and also demanded for time-bound speedy disbursement of funds.

Kasem, also a former DCCI President, said a delayed or deferred payment system could be introduced as the CMSMEs are under pressure with the payments of VAT, tax and utility bills.

He said formulation of a database for the CMSMEs is very important as it will help to make better policy design.

Chairman and CEO of Pran-RFL Group Ahsan Khan Chowdhury said the entrepreneurs were benefited from the stimulus packages during the pandemic and if the micro and small entrepreneurs could be protected through financing, they would be able to make a turnaround.

He said that the BSCIC could create a linkage between the large-scale industries and small industries while it should give more attention to the CMSMEs to ensure their revival.

Welcoming some specific proposals in the budget, especially for the automobile sector, VAT waiver, and benefits for the CMSMEs, DCCI President Rizwan Rahman said one simple car production needs some 8,500 spare parts and it would develop a strong backyard linkage industry in the country. "It's just a start,"

He suggested withdrawing the advance income tax considering the pandemic situation.

The DCCI President also proposed providing 50 percent of the government stimulus package to the micro, cottage and small industries, withdrawing tax on Facebook advertisement to spur the growth of the e-commerce market, digitization of SMEs and providing fiscal literacy training to the bankers.