MSMEs Are Pillars of Bangladesh’s Economy

Small and medium enterprises have proved themselves as the pillars of sustainable growth for Bangladesh. These enterprises employ 80% of the total working population of the country. They are also a key driver of growth; the sector contributes to 25% of the country’s GDP. This year’s MSME day theme was “Resilience and Rebuilding: MSMEs for Sustainable Development.”

MSME day was celebrated yesterday, June 27 2022, and according to the UN resilience and rebuilding are at the forefront of building back better from the damage sustained during the Covid-19 pandemic.

Dr Masudur Rahman, chairman of the SME Foundation, said, “If we can involve more people in this sector by creating more jobs then, more sustainable and the sustainable development of the country will be realized.”

MSMEs being built now or in the future have to be resilient to future shocks, such as pandemics, inflation, and supply chain disruption. Against such an onslaught of crises keeping business afloat is the main challenge. All stakeholders should come forward and work together to improve this sector. Furthermore, two-thirds of MSMEs in Bangladesh do not avail banking services in their business. MSMEs are plagued by a lack of capacity, skills, technologies and innovative designs.

The SME Foundation has already taken steps to address some of these issues. They are marketing SME products, business services, skill development and training programs and have 40,000 thousand entrepreneurs in their 1,300 training centres. They are also dedicating 300 special training centres for training 9000 women entrepreneurs. Furthermore, they have disbursed TK 300 crore loan through 11 banks and non-financial institutions.

The government of Bangladesh is also keen on developing this sector, in the budget FY23, govt. has included Vat, customs, and tax-related proposals submitted by the SME Foundation.

According to United Nations, globally MSMEs account for 90% of the business, 60% to 70% of employment and 50% of worldwide GDP.

MSMEs stand as the backbone of societies, from local economies to global economies. Developing this sector is critical for future developments. As such policymakers should work to eliminate barriers to MSMEs growth.