Structural reforms for easy loan disbursement process urged

Staff Correspondent: Structural reforms of loan disbursementprocess, less documentation process, establishing a specialized SME bank, acomprehensive SME database, policy reforms, bank-SME good relation, cash flow-based loan sanction, considering working capital loan as term loan andconsidering large and small investors equally will pave the CMSMEs toflourish as the sector is the lifeline of the country’s economy, expertssuggested at a discussion.
They made the suggestion at the meeting titled “Procedures of availingloan from SME stimulus package” between SME Foundation and Dhaka Chamber ofCommerce and Industry (DCCI) held today, said a press release.
Professor Dr Md Masudur Rahman, Chairperson of the SME Foundation joinedthe meeting as the chief guest and Dr Md Mafizur Rahman, Managing Director ofthe SME Foundation joined as special guest.
In his speech, DCCI President Rizwan Rahman said that the contributionof CMSME to the GDP is only 25 percent whereas it is 35-60 percent inPhilippines, Vietnam, Sri Lanka and China. According to a local study, he said, overall income from the CMSMEsector reduced to 66 percent in 2020 in comparison to 2019 and 76 percent ofproducts remained unsold, he said. According to a DCCI study, it was foundthat due to pandemic 62 percent CMSMEs have to cut their manpower and 90percent are continuing their businesses with less capacity.
Seventy three percent of the stimulus package has been distributed butmost of the CMSMEs are still deprived of that fund, he added.
He also said that medium enterprises have good relations with Banks incomparison to small entrepreneurs because of lack of documentation andconfidence.
A CMSME friendly fund and easy access to the loan management system isthe demand of time now, he added.
Professor Dr. Md. Masudur Rahman said SMEs are the lifeline of oureconomy and during the pandemic we were able to uphold this image to thepolicy makers.
According to the data of 2013 SMEs are 78 lakh but at present thisnumber is more than 1 crore, he added.
He said 60 percent GDP of India and China comes from SMEs and SMEentrepreneur’s capacity building which is more important for financialinclusion.
Dr Md Mafizur Rahman said SME Foundation has disbursed about Tk 122crore within one and half months and this amount went to SMEs. “We cannothandle the money, we do not have that mandate as SME Foundation. But hereiterated establishing a specialized SME bank. Tk 200 crore is not enoughfor the rest of the SMEs but by 31st December this year we will completedisbursement of this fund,” he added.