Designed by: Hossain MD Sahal
Small and midsize enterprises (SMEs) play a pivotal role in every economy. SMEs give opportunities to entrepreneurs to let their innovative ideas come to life. SMEs also employ many people through inclusive growth while eradicating poverty in developing countries. Currently, in Bangladesh, 78 lakh SMEs employ about 2 crore employees. The estimate of SMEs contributing to the GDP is around 25%, linking the importance of their role in the economy. Alongside its importance, the sector needs to be nurtured appropriately for promising growth and survival in the future.
The Planning Minister has also highlighted the importance of SMEs, mentioning that they must be brought under the mainstream. Allowing young entrepreneurs and helping them build a better Bangladesh is the goal, leaving no one behind. Digital Bangladesh is now a reality, no longer a fantasy. Even though the economy has been growing exponentially, the SME sector has suffered incredibly due to the ongoing pandemic and restriction measures; there has been a lack of funds to invest in capital, along with being unable to pay taxes. After the lockdown, owners reopened their enterprises, but several have faced difficulties paying rent and utility bills.
To curb the adverse effects that the pandemic had on SMEs, financial institutions such as IDLC distributed 38% of their loans to SME loans. The government has also made efforts to help SMEs through favorable tax treatments to help their survival. However, according to a survey conducted by the United Nations Industrial Development Organization, only 9% of micro-enterprises, 12% of domestic-oriented businesses, and 4% of other low-tech companies said they had received government assistance, implying that the programs have not yet reached those who are most in need. The question of efficiency arises.
While the SME sector grows, it keeps facing difficulties in several aspects as support from the government and other organizations is still lagging, as discussed previously. Effective coordination between government agencies, domestic microcredit organizations, and private sector organizations is crucial for assisting and supporting SMEs. Problems regarding affordable financing, non-availability of working capital, low levels of technology, low productivity, and lack of marketing facilities and market access challenges are some of the problems most typically observed. Furthermore, unpredictable power and gas supply, infrastructural deficiencies, compliance concerns, and fierce competition in domestic and foreign markets have been major roadblocks to the growth of Bangladeshi SMEs.
SMEs also need to put in the effort to be more responsive to the consumers' needs. In a shaky economy where several waves of the pandemic can hit at any time, it is vital to have a solid ground for a business to survive and flourish. To anticipate customer needs and provide the best customer service and support is crucial. During this research, an SME from the agricultural sector was judged. While opening their website, it was challenging to navigate through as the web page was not adequately developed, and most items shown were not available. This underlines the inability of SME owners to market their products. Any product's current and future growth prospects are heavily influenced by marketing activity, especially in a social media reliant society. This necessitates a well-thought-out marketing strategy, including an ad campaign, as well as the necessary resources to carry it out. Unfortunately, SME entrepreneurs are at a disadvantage because they cannot make appropriate marketing investments and lack marketing expertise. To facilitate this lack of commitment towards customer satisfaction, SME owners must invest in marketing strategies to better meet the needs of the consumers and find more potential consumers. This can be solved through appropriate marketing agencies.
It is also crucial for SME owners to collect and analyze data. There is a substantial lack of research and development facilities due to data inadequacies and the lack of a database of SMEs, which would allow for more significant research and policy analysis in this sector. The local government and non-governmental organizations (NGOs) may be included in the data collection process because they play critical roles in supporting and fostering the growth of local businesses.
To summarize, several SME development strategies and measures are required to advance reforms that may facilitate the dynamics and growth of the SME sector by relying on three critical aspects throughout the pandemic:
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