There is need for improving the market structure of the banking sector to enhance access to formal finances by the cottage, micro and small enterprises (CMSEs). The finding came up in a BIBM-sponsored survey - 'SME Financing in Bangladesh: Do Local Banking Market Structures Matter?' - presented on Tuesday through online platform.
BIBM (Bangladesh Institute of Bank Management) Associate Professor and Director Dr. Ashraf Al Mamun along with Associate Professor Dr. Md. Mosharref Hossain conducted the survey.
Its other authors were: BIBM Assistant Professor Dr. Md. Mahabbat Hossain, SME Foundation Assistant General Manager Suman Chandra Saha, and Bank Asia Ltd FAVP Ishtiaque Ahmed Rahat.
The survey found that about 73 per cent of the sampled firms had the need for borrowing, and of these only 33.17 per cent obtained loans from banks.
The study used 416 questionnaires received from CMSEs, and 34 questionnaires from banks.
It said some 85.33 per cent CMSEs were not satisfied with the banking network. The CMSEs cited some reasons for not borrowing from banks, which included time and cost involved for bank visits.
The CMSEs used alternative sources for funding, like those provided easy access, easy processing of loans, and low demand of documents. Local NGOs and informal lenders dominated the lending to small businesses.
BIBM Executive Committee Chairman and Bangladesh Bank Deputy Governor Ahmed Jamal was present in the seminar as the chief guest. Dr. Ashraf Al Mamun delivered the welcome address, while BIBM Director General Dr. Md. Akhtaruzzaman chaired the programme.
