Limited access to finance has hindered small and medium enterprises (SMEs) in Bangladesh, according to a new report on the country’s economy. The 12-member committee, led by economist Debapriya Bhattacharya, found that banks favor larger companies, making it difficult for SMEs to operate effectively.
The report highlights cumbersome licensing procedures, inconsistent rule application, and inadequate government support as major barriers to scaling up. This environment restricts the growth of smaller businesses, particularly in key sectors like ready-made garments (RMG).
Md Ali Zaman, president of the Small and Medium Enterprises Owners Association of Bangladesh, criticized the existing financial landscape, saying only well-off groups benefit from business financing. Even government initiatives have not reached intended small enterprises.
The report notes that 57% of SME entrepreneurs cited tax structure as a major obstacle to compliance, while 54% highlighted trade license renewal process challenges. Infrastructural deficiencies, including unreliable power supply and poor transportation networks, also hinder SMEs’ expansion capabilities.
To address these issues, the white paper calls on policymakers to simplify regulatory processes, improve infrastructure, and enhance access to finance for SMEs. This will foster a more inclusive business environment and boost the contribution of SMEs to economic growth.
Source: https://apparelresources.com/business-news/policy/smes-bangladesh-face-financial-constraints-hindering-growth