Wednesday, 04 December, 2024
More than 74% of small and medium enterprise (SME) entrepreneurs in Bangladesh are eager to operate within the country’s legal framework, according to a study conducted by the SME Foundation. However, the study suggests that simplifying government rules and regulations, establishing one-stop services, and increasing access to collateral-free loans are essential for facilitating compliance.
Professor Dr. Melita Mehjabeen of Dhaka University presented the findings during a seminar titled "Informal SMEs in Bangladesh: Formalization Challenges and Way Forward," held at the Agargaon Tourism Building in the city. The event was organized by the SME Foundation and the German development agency Friedrich-Ebert-Stiftung (FES), Bangladesh.
The seminar was attended by Industries Adviser Adilur Rahman Khan as the chief guest, while Zakia Sultana, Senior Secretary of the Ministry, was the special guest. Dr. Felix Gerdes, Resident Representative of FES Bangladesh, and Gunjan Dallakoti, Program Head of the International Labor Organization (ILO) in Bangladesh, also spoke at the event. The seminar was chaired by Anwar Hossain Chowdhury, Managing Director of the SME Foundation, with Md. Nazim Hasan Sattar, General Manager of the Foundation, delivering the welcome speech.
The study revealed several challenges faced by entrepreneurs. About 57% of respondents cited the tax structure as the primary obstacle to legal business operations, while 54% pointed to difficulties with the trade license renewal process. Other concerns included the high costs of trade licenses (51%) and the complexity of government regulations (44%).
The research, which surveyed 304 entrepreneurs from Dhaka, Chattogram, Sylhet, Khulna, and Rajshahi, also compared the situation in Bangladesh with India. Entrepreneurs noted that in India, only seven certificates are required from various government departments to operate legally, whereas in Bangladesh, at least 34 certificates are necessary.
According to the 2013 Economic Survey by the Bureau of Statistics, there are over 780,000 CMSME establishments in the country, employing approximately 25 million people. Despite this, many of these businesses remain informal and operate outside the government’s regulatory and tax framework.
Experts at the seminar recommended that the government develop a comprehensive strategy to formalize these businesses step by step, simplify the regulatory process, and offer both financial and non-financial incentives to entrepreneurs.
Representatives from various ministries, SME chambers, banks, financial institutions, and research organizations attended the seminar, highlighting the importance of a streamlined approach to support Bangladesh's vibrant SME sector.
Since its establishment in 2007, the SME Foundation has supported nearly two million small and medium entrepreneurs, helping them benefit from a range of government-backed programs aimed at fostering the sector’s growth in line with the National Industrial Policy 2022, SME Policy 2019, and the UN SDG 2030 goals.
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More than 74% of small and medium enterprise (SME) entrepreneurs in Bangladesh are eager to operate within the country’s legal framework, according to a study conducted by the SME Foundation. However, the study suggests that simplifying government rules and regulations, establishing one-stop services, and increasing access to collateral-free loans are essential for facilitating compliance.
Professor Dr. Melita Mehjabeen of Dhaka University presented the findings during a seminar titled "Informal SMEs in Bangladesh: Formalization Challenges and Way Forward," held at the Agargaon Tourism Building in the city. The event was organized by the SME Foundation and the German development agency Friedrich-Ebert-Stiftung (FES), Bangladesh.
The seminar was attended by Industries Adviser Adilur Rahman Khan as the chief guest, while Zakia Sultana, Senior Secretary of the Ministry, was the special guest. Dr. Felix Gerdes, Resident Representative of FES Bangladesh, and Gunjan Dallakoti, Program Head of the International Labor Organization (ILO) in Bangladesh, also spoke at the event. The seminar was chaired by Anwar Hossain Chowdhury, Managing Director of the SME Foundation, with Md. Nazim Hasan Sattar, General Manager of the Foundation, delivering the welcome speech.
The study revealed several challenges faced by entrepreneurs. About 57% of respondents cited the tax structure as the primary obstacle to legal business operations, while 54% pointed to difficulties with the trade license renewal process. Other concerns included the high costs of trade licenses (51%) and the complexity of government regulations (44%).
The research, which surveyed 304 entrepreneurs from Dhaka, Chattogram, Sylhet, Khulna, and Rajshahi, also compared the situation in Bangladesh with India. Entrepreneurs noted that in India, only seven certificates are required from various government departments to operate legally, whereas in Bangladesh, at least 34 certificates are necessary.
According to the 2013 Economic Survey by the Bureau of Statistics, there are over 780,000 CMSME establishments in the country, employing approximately 25 million people. Despite this, many of these businesses remain informal and operate outside the government’s regulatory and tax framework.
Experts at the seminar recommended that the government develop a comprehensive strategy to formalize these businesses step by step, simplify the regulatory process, and offer both financial and non-financial incentives to entrepreneurs.
Representatives from various ministries, SME chambers, banks, financial institutions, and research organizations attended the seminar, highlighting the importance of a streamlined approach to support Bangladesh's vibrant SME sector.
Since its establishment in 2007, the SME Foundation has supported nearly two million small and medium entrepreneurs, helping them benefit from a range of government-backed programs aimed at fostering the sector’s growth in line with the National Industrial Policy 2022, SME Policy 2019, and the UN SDG 2030 goals.
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