The terms and conditions of government stimulus packages offered to businesses amid the Covid outbreak are not suitable for small and medium enterprises and woman-run business entities, said experts.
The experts made the comments at a policy workshop on ‘Covidinduced Stimulus Packages for SMEs & Women-led Enterprises: Exploring Research-Policy Interlinkages’ arranged by the Centre for Policy Dialogue in partnership with the SME Foundation under the Women’s Economic Empowerment through Strengthening Market Systems (WEESMS) programme on Sunday.
The WEESMS programme is funded by the Embassy of Sweden and implemented by iDE Bangladesh and the SME Foundation.
Policy researchers said that targeting policy tools for SMEs and women entrepreneurs was always difficult in terms of selection and identification of beneficiaries since these entities were mostly informal and were not registered under the government database.
As result, the SMEs and women enterprisers at rural level faced difficulties as borrowers to comply with the terms and conditions given the new reality of business-related difficulties during the pandemic, they added.
They suggested that better specification of stimulus packages in terms of the levels of vulnerability of different categories of entrepreneurs as reflected in research findings could help to ensure better outcomes.
CPD research director Khondaker Golam Moazzem presented the keynote presentation.
He said, ‘A major weakness in the stimulus disbursement packages is that the terms and conditions for loan disbursement have been kept the same as those in the pre-COVID period,’
The government has declared various schemes to support the SMEs and women entrepreneurs during the pandemic in different phases — Tk 20,000 crore refinance facility and Tk 10,000 crore refinance working capital, BB’s special enterprises refinance scheme especially for women, CGS facility, start-up fund, 10 per cent CMSME loan for women, refinance facility, introduction of help desk in bank branches, ‘special monitoring cell’ in banks.
The Bangladesh Bank has created several refinancing schemes worth a total of Tk 415 billion with a one-year special repo facility and a credit guarantee scheme for exporters, farmers, and SMEs to facilitate implementation of the government’s stimulus packages.
Out of these, Tk 200 billion has been announced for the SMEs as refinance facility.
An additional Tk 15 billion package has been announced for the microcredit and marginal people’s lifestyle development programme.
Local government and rural development minister Md Tajul Islam was present as the chief guest at the session.
He said that Bangladesh’s history was rooted in the goal to achieve the betterment of the poor.
‘In line with that goal, the stimulus packages aim to cover each class of people inculcating the advantages both in urban and rural lives,’ he said.
The Asia Foundation Bangladesh country representative Kazi Faisal Bin Seraj delivered the introductory remarks.
CPD executive director Fahmida Khatun moderated the session.
SME Foundation women entrepreneurship, technology, capacity and cluster development wing general manager Farzana Khan said that the SME Foundation had been disbursing stimulus packages worth Tk 300 crore through banks and financial institutions but women were facing difficulties in availing loans through the banks even though they were now more aware of the documentation process.
Nasima Akter Nisha, joint secretary of the e-Commerce Association of Bangladesh, highlighted the importance of extending the two-year time period for loan repayment.
She put emphasis on increasing awareness as well as easing the documentation process for the SMEs, especially women entrepreneurs.
The issue involving the lack of relevant database was echoed in the discussion delivered by Dhaka University professor and former development studies department chairman M Abu Eusuf.
Updates on the disbursement of the stimulus packages should be made public on a regular basis, he added.
He felt that the bank-client relationship should be more femalefriendly and unbiased.
He also shed light on issues related to collateral guarantor, one stop service, among other things.
Dhaka University Economics Department professor Sayema H Bidisha shed light on issues like lack of information, market availability and connectivity with the support chain, among other things.
Swedish ambassador in Dhaka Alexandra BergVon Linde was present as the guest of honour while member of standing committee on ministry of foreign affairs Kazi Nabil Ahmed attended the event as a special guest.
The vote of thanks was delivered by iDE Bangladesh associate director (programme) Saroja Thapa.
She said that the SMEs and CMSMEs were two of the hardest-hit sectors during the pandemic.