The coronavirus pandemic has seen the death of many huge global business empires. Many renowned brands of Europe and America have declared bankruptcy due to fall in sales during the months of lockdown and its aftermath. Bangladesh too is facing an economic slowdown since the advent of Covid-19 in the country. But we have been luckier in many ways compared to the developed countries due to timely actions of our government. Also, as the more affluent of our people came forward generously to help those who are less fortunate in the society, many families could tide over the lockdown period.
But come what may, we cannot deny that the economic impact of Covid-19 has dealt the death blow to many small and medium enterprises throughout the countryside. Small enterprises in Bangladesh significantly provide livelihood to millions of our artisans, student entrepreneurs and women entrepreneurs.The demise of many of these small businesses might bring thousands of low income families on to the streets. Many of these can be revived with the help of a small amount of bank loans extended to them. But most small entrepreneurs, particularly the women entrepreneurs, are unable to approach banks for loans as they cannot meet some of their loan criteria. Therefore, we feel that the loan criteria for SMEs should be more relaxed and approachable. Particularly bank loans for SMEs should be more women-friendly in reality instead of only on paper.
Although the government has been urging banks to extend a certain percentage of their loans to the small and medium enterprises, most banks fall far short of following the government directives on the pretext of it being financially too risky. In reality, very few small and medium enterprises are among the bank loan defaulters list. Rather, the biggest bank loan defaulters are to be found among the mega and large enterprises.
With few exceptions, no genuine entrepreneur becomes loan defaulter intentionally. Rather, a stretch of bad luck or circumstances beyond control lead businesses to fall behind in repayment. During such unlucky phases, sometimes it may help a business to survive if the creditors extend the time for loan repayment. Reserving some area in the new upcoming economic zones for SMEs and women entrepreneurs might be a real reflection of the government’s positive intent.