The Financial Express
Swasti Lankabangla Swasti Lankabangla

SMEs can address many of the economic ills  

SMEs can address many of the economic ills   

With the conclusion of the nine-day 8th National SME Product Fair yesterday at the Bangabandhu Conference Centre, the sector has made a bold statement of the role it plays in the socio-economic development of the country. Of the total 296 SME units showcasing their products at the fair, 195 were owned by women and 101 by men. Whether there are units either doing well or have potential enough to make their marks but remained unrepresented is not known as no report hinted at this. 

Here is a sector that contributes 25 per cent to the country's gross domestic product (GDP) but even more significantly 80 per cent of employment opportunities are created on this count. Yet the most positive development here is that women entrepreneurs are coming forward to prove their worth. The 195 units owned by women as against 101 by men is a testament that at the grassroots level a quiet socio-economic revolution is taking place so far as entrepreneurship development is concerned.

So the SME sector's contribution reaches far beyond the annual turnover or the proportion compared to industrial or other outputs. Empowerment of women in villages breaks the mental barrier in the first place. Second, here is an area that can combine agriculture and industry to add value to agro produces through development of an agro-industry. In an overpopulous country, the SMEs are well positioned to distribute income more rationally than any other trade can. Over the past decade, the sector has come a long way but still has miles to go before it can realize its objectives.

Prime Minister Sheikh Hasina has taken keen interest in development of women entrepreneurship and to that end she has handed over prizes and crests to five best SME entrepreneurs as part of her encouragement for them. She has been doing this because she realizes how important a role this sector can play in creating wealth at the grassroots level and become decisive in closing the gap between village and urban economies. At the same time a powerful SME sector will help the country's sustainable development. If village economy gets stronger, the majority of people's purchasing power will improve and this is a prerequisite for creation of demands for commodities leading to a development momentum.

The free-market economy is exposing many of its imperfections and ills -none more so in the area of distribution of wealth and this has created social polarisation of stupendous proportions so much so that 90 per cent of the world population have to their disposal only 10 per cent of the global wealth and the rest 10 per cent have 90 per cent of wealth. This is a compelling reason for creating employment or opportunities for income for the poor and vulnerable of society. In a country with a large population in a small land area, the situation is even more pressing.

Thus it becomes clear that the country does not need technologies like artificial intelligence (AI) so much as it needs initiatives and entrepreneurs like SMEs. The units have to be people-friendly. At the same time they have to be diversified so that products do not overlap and on the other hand the country does not have to import some small but essential items like pins, james clips or staplers.

Promotion of light engineering is essential in this regard. If China's social mobilisation is a plus point for that country to have developed industrial villages of specialised products, resourcefulness and resilience of Bangladesh people -particularly those involved with farming can go a long way in creating such industrial villages. The SMEs should well fit into such a scheme.

However, what stands in the way is the required capital. Investment in such enterprises is hard to come by. Women entrepreneurs in particular still find it difficult to have access to government credit. There are various constraints to qualifying for such credits. Lack of collateral in the absence of entitlement to lands is one of the greatest hurdles. Also cooperation from families in villages cannot be expected when women embark independently on a manufacturing venture. For female-headed families this may not apply but not many are convinced of their managerial and marketing skills.

So women have to overcome a lot of hurdles before establishing their claim to successful entrepreneurship. However, if educated and ambitious women come forward to prove their visions and skills, things are likely to change for the better. One key area of entrepreneurship development is information of related technologies and data. These are necessary for assessment of product demand, exploration of and access to market. The SME Foundation can do this for women entrepreneurs. Now that paddy cultivation is proving unrewarding and even labour of love is lost, farmers are opting for diversification of agriculture with success. Some such ventures will automatically open avenues for small and medium-scale ventures. For example, soyabean and sunflower cultivation on a mass scale may prove highly rewarding provided that those have units for processing the produce into products. Even a bumper crop of such non-traditional crop will hardly fetch deserving prices without the allied manufacturing units or plants. Here the SME Foundation can provide the required consultation and other supports to set up such units.



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