In the business world, small and micro-businesses form an absolute majority worldwide.

Bangladesh as a developing country has started refocusing its attention on SME to enhance
its economic stability.
Though there is no any standard definition of SME in the world, we can say that small
business is a business which starts its activities with small amount of capital, small amount of
land, few numbers of employees & to serve small numbers of customers it is known as small
business.

BSCIC is involved in a very wide range of activities that are not necessarily related to
industrial estate development; many are social programs aimed at supporting poorer sections
of the community. These include all of the activities currently managed by the Project
Implementation and Management Division under its responsibility for the development of
rural industries which includes the Womens Entrepreneurship Development Program; the
self-employment project for small and cottage industries; the Poverty Alleviation Program;
the cottage industries development program in the Chittagong Hill Tract Area; the
development of bee-keeping; the development of salt industries; and creating linkages with
Youth Welfare, Womens Affairs, Social Welfare, and other organizations engaged in the
promotion of income-generating activities, with the aim of achieving integrated rural
development. These are all socially-oriented programs that might best be run and managed
outside of an industrial estates context.

BSCIC is engaged in a whole host of services that are more appropriately provided by the
private sector. These include many of the ancillary services noted above, and include the
provision of assistance to enterprises to operate at optimum capacity; training programs
on technical quality control, and providing advice on quality standards, marketing and
financial management; developing sales promotion literature; operating a Design Center
and providing design, product, process, and technology development assistance including
supplying prototypes of products, machinery, equipment, and tools for small industries;
providing training for craftsmen, technicians and managers; and undertaking proper
financial analysis and pre-investment feasibility for proper utilization of loan and equity
financing resources.

The indications from this review and the general sense among the private sector in Bangladesh
are that BSCIC as an organization is in decline, it is doing too many things, and it is probably not
doing these things well, and it is doing things it should not be doing at all. The major conclusion
from this is that BSCIC needs to be restructured, and, if its activities are to be given a new lease
on life, it needs to be radically restructured along the following lines.

Remove Responsibility for Industrial Estate Development from BSCIC/Ministry of

Industries. The creation and development of industrial estates can be a compelling engine
for industrial development. For example, Hungary has been very successful in its efforts to
develop a system of industrial parks throughout the country, and now has 133 of these - all
developed since the early 1990s, with plans in place to increase this to 250 over the next ten
years. Hungary has thus relied heavily on industrial parks as a means of developing its
economy.
Because Bangladesh industrial estate development is focused so much on small and cottage
industries, this clouds the situation with regard to the contribution that industrial estates can make
to the countrys development. Because BSCIC develops industrial estates, the perception is that
Bangladesh has an effective industrial estates development authority, when in fact BSCICs
industrial estates are no more than a tool for providing employment to poorer rural workers.
Industrial estates in Bangladesh need to be used as a driving force for industrial development with
the capability of attracting every type of industry, not just small-scale and cottage industries.
These types of industries can benefit substantially from having space in industrial parks which
also attract and facilitate larger industries, because in at least some cases, they can learn to supply
better products as suppliers to larger companies, a factor that is not often available when they are
restricted to smaller estates. Small-scale enterprises can still be provided with plots in larger
industrial estates.
A further point that should be considered as important is that BSCIC is currently a unit of the
Ministry of Industries, and is thereby subject to all the requirements that are placed on it as a unit
of the Ministry. This tends to inhibit innovation, and requires that the Ministry approve all
decision-making.
The major recommendation here is that responsibility for developing industrial estates be
removed from the Ministry of Industries and that a new autonomous agency responsible for the
development of industrial estates, similar to the way that BEPZA is set up to report to a Board of
Governors that is headed by the Prime Minister. Alternatively, industrial estate and EPZ/free zone
development could be combined under a unified industrial property development framework.
Develop a New Industrial Estates Law. A significant amount of discussion will need to take
place before a decision can be taken in the Government to proceed with the dismantling of the
BSCIC as a developer of industrial estates and the creation of a new institution with wider
responsibilities, and incorporating a more modern approach to industrial estate development that
will include provisions for private sector involvement in estate development and management.
A new Industrial Estates Law could be drafted which could provide the impetus for movement
towards a new organization to replace BSCIC, and should include provisions for the following:

Autonomy for the Industrial Estates Development Authority on the same basis as that
granted to BEPZA;

A Board of Governors that would include the Prime Minister as Chairperson, include
Ministers from all the economic Ministries, and an appropriate number of private sector
representatives;

Appointment of an Executive Chairman from the private sector who would report directly
to the Prime Minister;

Absorption of the current BSCIC industrial estate development function (which would
also include BSCIC executives from relevant areas of BSCIC);

Authority to maintain and manage its funds separately and independently from the
Central Government, but whose budget should be subject to the constitutional provisions
governing the states general budget;

Authority to create and develop all types of industrial estates, including estates for small
and cottage industries;

Authority to manage, promote, regulate, plan and carry out policies agreements,
strategies, legal and regulatory standards, and plans and programs related to the
development of industrial estates in Bangladesh;

Authority to exercise the custody, conservation, operation administration, and disposition

of State assets under its control;

Authority to regulate the activities of natural or corporate persons that establish

themselves with the industrial estates;

Authority to draw up, adopt or approve the Master Plan for the Use of Lands and a
detailed Zoning Plan;

Authority to enter into acts, operations and agreements for the rendering of all kinds of
services, works, technical assistance, acquisition of equipment and supplies, construction
of infrastructure and installations, as well as all that is required for the proper operation
of the Authority and the development of the industrial estates under its control; and

Authority to make contracts, by way of lease, sale, concession, trust, assignment,

temporary use, custody and mortgage and other forms of disposition of assets, while
safeguarding the States interests.

Authority to determine and collect fees for any services rendered by the Authority.

Restructure BSCICs Role in Developing and Overseeing Social Programs. Consideration

needs to be given to removing responsibility for the social programs currently being run by
BSCIC as part of its responsibility for the development of rural industries, not least because
BSCIC appears to be no longer active in most of these programs although some BSCIC
workers are still engaged in them. These include all of the social programs already referred
to above, including the Womens Entrepreneurship Development Program; the Poverty
Alleviation Program; the Chittagong Hill Tract Area cottage industries development
program; bee-keeping training and development; and salt industries development. It is not
possible to identify where responsibility for these programs should reside but they are all
socially-oriented programs that might best be run and managed outside of an industrial
estates context. An independent study needs to be carried out to determine how successful in
fact, these programs have been, and how and where they should reside in the future.
Privatize those Services more Appropriately Provided by the Private Sector. The final
agglomeration of activities that BSCIC is involved in and that needs to be rationalized is the
range of consulting and research type activities that are provided to BSCIC clients, including
the operation of the Design Centre; providing design, product, process, quality control and
technology development advice; supplying prototypes of products, machinery, equipment,
and tools; organizing trade shows; developing sales promotion literature; providing training
for craftsmen, technicians and managers; and advising on loan utilization. All of these
services should be provided by the private sector, mainly through consulting services,
although the ability of the current recipients of such services to pay for them would
inevitably questionable if they were provided through the private sector. It would be
necessary to carry out a study to determine how best to privatize these services.

Government policy
Until today Bangladesh could not make a standard SME policy to operate this sector
significantly. Moreover the government policy emphasizes on production factors rather than
human factor. Human factor is getting the least attention for the promotion of small business
in the country. There is another problem for making the policy. Government is not making a
clear cut policy of developing small business in the country.
Awareness of facilities
Sometimes government offers a few facilities to the small business but owners of small
business are not aware of the available facilities in the country for establishing small
business. There is no any proper media to aware small business owner about facilities.
Training facilities
To develop entrepreneurship and small business in the country availability of training and
education facilities is must. But in Bangladesh there are hardly any training facilities for the
small businessman.
Incentive measure

To develop the small and medium enterprise government of country has to provide the
incentive measure. But here the small entrepreneurs are deprived of such incentives.
Loan facilities
Different financial institutions are offering loan facilities to small business owner. But it is a
problem that small business owner who has no any power doesnt get loan facilities very
easily.
Security
Many small business owners operate their business in open place like field, road, bus, and in
other transportation. They are not secured because they face many dangerous situations.
Women entrepreneurship
Women are controlled by man means husband or father or elder brother. So women small
business cant be operated very smoothly. In our country there is no suitable social
environment to operate small business by women.
Small capital
Small business owners have no huge capital to operate the business. So they cant achieve
the apex of goal. Modern technology they cant use and standard product they cant produce.
Above mentioned points are considered as strong barriers of SME development in
Bangladesh. So it can be said that to increase the contribution of SMEs on Bangladesh
economy government, NGOs, commercial banks, others financial institutions have to put
great emphasize on SMEs sector in Bangladesh
4.4 Government budgetary measures for the development of SME in 2010
Table
Sectors
Taka(cr)

%
Fiscal year
Economy& industry
1219
1.07%
2010-2011
Business

185
0.16%
2010-2011
Bangladesh is agriculture based country. So main priority is given to this sector always, but
comparatively business sector always gets little priority, though it has great contribution on
our economy. To develop the SME sector Bangladesh government has to give great priority
to this sector.
4.5 Role of SME on economic development of Bangladesh
The role of small and medium enterprises (SMEs) to economic development of a country is
well organized. Across the globe it is strongly perceived that SMEs do play vital role in the
industrial development, economic development of a country. Bangladesh is not lagging far
behind in this respect. SME has great opportunity in this country. Environment, cheap labor,
business strategy etc are the key features of SME.
In view all the favorable factors; there is an urgent need in development of SME in
Bangladesh as a developing country.
SMEs are characterized on the basis of size, investment and employees in most countries
across the world.
Here are small business are those which have employees less than 50 person and have an
investment of less than tk. 250 million.
On the other hand, medium enterprises are those which have investment between tk.250
million and tk. 500 million with the number of employed workers ranging to 50 and 99.
Generally, hand loom, food processing, lather and tannery, ceramic, light engineering,
electric and electronic, handicraft, specialized textile and garments etc are fall in the category
of small and medium enterprise.
Information from MIDAS suggested that, around 88% of countys total industrial workforce is
employed in the SMEs and the sector manufactures over 33% of industrial value added
goods.
Although there is no concrete information about number and types of SME in Bangladesh,
an estimate of the Bangladesh small and cottage industries corporation (BSCIC) says that,
there are over 42000 cottage industries in Bangladesh.
There are also tens of thousands of small industries and a large number of hand loom and
power loom industries in this country.