Business Initiative Leading Development (BUILD) has called for ensuring financial schemes and credit lines for exporters in order to maximize export competitiveness.
BUILD made the plea at a dialogue on Financing Schemes and Available credit Facilities for Export Competitiveness under the 7th Financial Sector Development Working Committee (FSDWC) Meeting on Wednesday at DCCI Board Room.
Speaking as the Chair, Ahmed Jamal, Deputy Governor of Bangladesh Bank said BB has simplified the Foreign Exchange Guideline to support the private sector and is implementing a number of reforms for export competitiveness.
The Ministry of Industries has drafted the SME Policy 2019 and is currently awaiting approval of the Cabinet Division, which was not coordinated with the Bangladesh Bank. So, the Deputy Governor requested the Ministry of Industries to hold a coordinated meeting with them before the gazette notification of the SME Policy 2019.
Echoing the voice of the participants, Waqar Ahmad Choudhury, Sr. Vice President of DCCI urged the government for looking for alternative financing facilities rather than borrowing all funds from public sector banks while implementing mega projects.
BUILD organized the meeting and presented two policy papers on Financing Schemes and Available Credit Facilities for Export Competitiveness of Bangladesh and Access to Collateral Free Loan for Women Entrepreneurs in Bangladesh. The first presentation shows how the SMEs in Bangladesh is constrained by limited access to credit, leaving them with a financing need while the second study unveils constraints while availing collateral-free long-term credit for SMEs run by women entrepreneurs. The study recommends guarantor identification, personal guarantee, group based loan, setting standards for definition of new entrepreneurs
The entrepreneurs also urged for a simplified trade license for marginal women entrepreneurs and an earmarked fund from the recently announced Tk 1.0 billion startup funding.
BUILD CEO Feradus Ara Begum updated the working committee members about the implementation of last working committee meeting and said that there is increasing demand for loans but complicated process is keeping the entrepreneurs at bay.
The dialogue laid importance on different pre-shipment finance and post shipment financing schemes for export competitiveness that includes Export Development Fund, Long Term Financing Facility, Green Financing, Green Transformation Fund, Refinancing Schemes by Bangladesh Bank and Islamic Shariah based finance, packing credit, factoring etc. It also proposed for some alternative financing such as Mezzanine Structures, Special Funds, ESCO Contracts, Impact Funds, Subordinated Bonds and many others. It was also informed that there are a number of credit lines for green financing but were not aware by the exporters. The policy paper by BUILD mentioned that a technical assistance component needs to be included in export financing and meeting the green financing needs.
Swapan Kumar Bala, Commissioner to the Bangladesh Securities and Exchange Commission (BSEC) informed that for greater securitization of funding one person company (OPC) is going to be corporatized so that documentation and related issues can be resolved. It was also informed that venture capital fund can also be explored for the women entrepreneurs. In case of venture capital funding a number of reforms have been taken but stamp duty at the rate of 2% still remains which increased upfront cost of the entrepreneur. These issues have been hampering the funding issue of the new entrepreneurs.
Dr. Shah Md. Ahsan Habib, Director, BIBM laid emphasis on both demand and supply side of funding so that the gap is minimized.
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