The pandemic has hit hard all businesses in the country and across the world. The small businesses are affected more whereas big businesses are recovering gradually by availing state-sponsored loans and credit facilities. According to recent media reports, small and medium enterprises (SMEs) and low-income groups, including farmers are unable to access loans, largely because of the reluctance of banks. In our country, benefits of stimulus packages are mostly enjoyed by big business houses.
This is indeed a matter for concern. We have reiterated previously urging banking and financial authorities to introduce and accelerate the loan disbursement process for the hardest hit small and medium businesses. But, the progress so far has been noticeably slow.
however, 81.87 per cent of the Tk 33,000 crore package for large industries and the service sector was approved by the lenders as of October 6 — only about a quarter of the Tk 20,000-crore package was dedicated for the SME sector — amounting to Tk 5,882 crore among 26,664 borrowers since September. Additionally , the situation is no less alarming for the farming sector which, as of September 30, saw only Tk 1,869 crore disbursed among 87,526 borrowers under the Tk 5,000-crore package. Several factors have been identified for the slow development in the SME sector, including the reluctance of lenders to promote stimulus and loan packages. Banks and financial sectors are also worried about the fragile state of SME sector as well.
The point, however, SMEs make a large portion of their profit ahead of seasonal and religious festivals such as Pahela Baishakh, Eid-ul-Fitr and Eid-ul-Azha, but they failed to do so due to the unanticipated outbreak of the pandemic. Moreover, with no vaccine to arrive any time soon, future of our SME entrepreneurs has become uncertain.Therefore, whatever the circumstances, the central bank cannot avoid its responsibility in this regard. It must do more to remove all circumstantial barriers in accessing the loans while ensuring all public banks to speed up loan pay-out process for small and medium business entrepreneurs. More to it, considering the large number of people who depend on the cottage, micro, small and medium enterprises in Bangladesh, current allocation of funds under the stimulus packages also need to be increased.Lastly, we should not forget that SMEs are the backbone of our economy. They contribute about one-fourth of the country’s gross domestic product, delivering jobs, growth and prosperity for millions of people across the country. The SME sector cannot sustain and grow without public and private patronage in these testing times.