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Sukamal Sinha Choudhury General Manager SME & Special Programs Department Bangladesh Bank, H.O, Dhaka
Contents
Internationalization of SMEs
SMEs comprise 98% of total establishments Contribute 65% of Employment Contribute 50% to GDP (**)
SMEs recognized as the backbone of economy. Therefore, Promoting a viable SME sector is essential.
* Beck & Kunt, 2005 (WB) ** DailyFT 28 June, 2013
Of the total share of manufacturing value added to GDP, SMEs contribution is estimated at 28-30%
10 [including family members] 10-24 25- 99 100-250 < 10 10-25 26-100 < 10 10-25 26-100
BBs Initiative for SME Sector Development Bangladesh Bank (BB) is the Central Bank of Bangladesh. A paradigm shift in the BBs policy regime in recent years. The policy has skewed in favor of the financially excluded and unbanked mass of the country specially towards the
SME entrepreneurs and women entrepreneurs Traditionally developed industry clusters. A milestone decision was taken in December,2009
A new department named SME & Special Programs Department (SMESPD) was created in BB to regulate and supervise SME financing activities of the whole country
Product development and marketing activities are also being undertaken by BB for the development of SME sector.
Types: Type-I: Cluster that characterized by dominance of SMEs Common in Bangladesh Type-II: Pyramidal type: One assembler many sub-contractors Example: Toyota
Cluster PromotesMarket and Innovation Enterprise-Enterprise and Enterprise-Trader transactions Increase Productivity Build new business opportunities
Clusters in Bangladesh
Ministry/Organization responsible Development Ministry of Industry SME Foundation (SMEF) BSCIC for SME cluster
SMEF identified 177 clusters countrywide, but has not taken any fruitful strategies for the development of such clusters.
Light Engineering
Monipuri Handloom
Problems
Lack of financial and skill training of entrepreneurs; Lack of product development and marketing knowledge; Proper access to finance especially for cottage and micro entrepreneurs due to lack of collaterals; Inadequate Financial Institutions outreach in the rural cluster areas; Flaws in product quality assurance to gain competitiveness in overseas market; Bottlenecks in the supply chain process; Absence of SME friendly people who can take the role of proper leadership and drive.
Remedies
Entrepreneurship and skill level training may be imparted in the cluster areas; Improvement of delivery channel and supply chain mechanism; Ensuring Financial Institutions involvement in rural cluster areas collaborating with NGOs/MFIs; Government and regulatory support in favor of the cottage, micro and small entrepreneurs; Engaging suitable governmental and non-governmental institutions to enrich product development and marketing knowledge of the entrepreneurs.
an extended product life cycle, economies of scale, sector and geographic diversification and greater competitiveness by the company.