Foundation system

SME Foundation seeks Tk 200cr

Create a fund for rural women entrepreneurs

The funds will be disbursed to rural women entrepreneurs to help them operate or expand their existing business so that they can mitigate the fallout from the pandemic. Photo: STAR/FILE

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The funds will be disbursed to rural women entrepreneurs to help them operate or expand their existing business so that they can mitigate the fallout from the pandemic. Photo: STAR/FILE

The SME Foundation has requested Tk 200 crore from the government “to set up a fund” to provide loans to small and medium enterprises (SMEs) owned by rural women to enable continued operations and even expansions amid the fallout from the pandemic.

The modus operandi of the fund will be decided once it becomes available, said the managing director of the SME Foundation, Md Mafizur Rahman, who requested the allocation through a letter to the Ministry of Industry on March 6.

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“The foundation has already distributed 300 crore of Tk to entrepreneurs through the stimulus package announced by the government about five months ahead of schedule,” Rahman said.

The government has so far allocated Tk 40,000 crore in two phases of equal amounts under a stimulus package dedicated to loan disbursement among artisanal, micro, small and medium enterprises.

Bangladesh Bank unveiled the first round worth Tk 20,000 crore in April 2020. Of the sum, 77% has been disbursed. His term expired last June.

The BB has allocated another Tk 20,000 crore for the current financial year. So far, only 39% of that amount has been disbursed between July 1 and March 10 this fiscal year, according to central bank data.

According to the letter, the government has allocated Tk 300 crore from the recovery fund in favor of the SME Foundation.

In the financial year 2020-21, the foundation enabled 925 entrepreneurs to receive Tk 100 crore and in the financial year 2021-22 an additional Tk 2,183,200 crore.

Among the beneficiaries, 736 were women entrepreneurs.

According to Md Ali Zaman, president of the SME Owners Association of Bangladesh, at least 80% of cottages, micro and SMEs have been affected by the pandemic.

There is no official data on the number of CMSMEs in Bangladesh.

The last time a survey was conducted was in 2013, when the total number of SMEs, excluding cottage and micro enterprises, of which there are hundreds and thousands, was 79 lakh.

The sector has contributed at least 25% to Bangladesh’s gross domestic product and generated up to 90% of private sector jobs.

At an event last year, Dhaka Chamber of Commerce and Industry President Rizwan Rahman said local industrialization must be emphasized to meet the export target of 40 billion dollars by 2030.

Handicrafts, micro and SMEs can add value to local industry, he said, suggesting setting up a specialized bank or fund to help SMEs recover from pandemic-induced losses while by formulating an act allowing their development.