The Present Scenario of Smes in Bangladesh

Assignment On The Present Scenario of SMEs in Bangladesh The Address Presented to the Adroitness of Business Administration in Partial Fulfillment of the Requirements for Degree of Bachelor of Business Administration Submitted To Dr. A K H Helaluz Zaman Advance Adviser Adroitness of Business, ASA University Bangladesh (ASAUB) Advance Title: Entrepreneurship Development Advance Code: MGT-321 Submitted By Name | ID| Section| Al-amin| 101-12-0054| 9B| Md. Alauddin Al Mahdi| 101-12-0064| 9B| Hyder Hossain| 101-12-0062| 9B| Nilufa Yesmin| 101-12-0067| 9B| Rashiduzzaman| 093-12-0035| 9B| ASA University Bangladesh (ASAUB) Date: 07 August 2012 ------------------------------------------------ Letter of Transmittal Date: 07/08/2012 To Dr. A K H Helaluz Zaman Advance adviser Adroitness of Business, ASA University Bangladesh (ASAUB) Subject: Submission of the Group Appointment . Sir, It is our amusement to abide the address on “The Present Scenario of SMEs in Bangladesh” as a allotment of our advance "Entrepreneurship Development" We accept enjoyed advancing this appointment which accomplished our activated adeptness of the abstract concept. We approved to reflect the activated operational aspects of the alignment which is commutual to the abstract lessons. Should you charge any added advice to adjudge the assignment, it would be our immense amusement to accouter you the same. Sincerely Yours Name| ID| Section| Signature| Al-amin| 101-12-0054| 9B| | Md. Alauddin Al Mahdi| 101-12-0064| 9B| | Hyder Hossain| 101-12-0062| 9B| | Nilufa Yesmin| 101-12-0067| 9B| | Rashiduzzaman| 093-12-0035| 9B| | ------------------------------------------------- ------------------------------------------------- Acknowledgement Advancing this appellation cardboard on “The Present Scenario of SMEs in Bangladesh” was a admirable acquaintance for our. At fast we would like to acknowledge absolute Allah to backpack on our work. We would like to acknowledge our adroitness member, Dr. A K H Helaluz Zaman , advance instructor, Adroitness of Business ASA University Bangladesh for giving our this befalling as able-bodied as for his connected advice and support. Finally we would like to acknowledge our ancestors for acknowledging our adventuresomeness to backpack on our work. It was a activated acquaintance for us. Executive Summary Bangladesh is s developing country. Its per capita assets is alone $750 and per capita GDP is $684 and present GDP advance amount is 6%. Best of the bodies are active in the beneath of abjection line. Abjection as like as anathema for our country. To abolish abjection government and alternative alignment such as NGOs, Coffer has taken abounding steps. Bangladesh Government has taken Millennium Development Goals (MDGs) programs that aboriginal goals is eradicate acute abjection and hunger. They additionally accept accounting Abjection Abridgement Action cardboard (PRSP) to abolish poverty. To accomplish the committed MDGs and PRSP, Bangladesh charge strive to expend application conception opportunities actual rapidly. For this government accept formed SMEs Foundation. SMEs agency Baby and Boilerplate enterprises, it can be authentic as enterprises which accept at best 250 advisers and an anniversary about-face not beyond 50 actor Euros. Further there is the acumen of Baby enterprise- they beneath than 50 agents associates and beneath than 10 actor Euros turnover- and micro- enterprises (less than 10 bodies and 2 actor Euros turnover). Altered countries and organizations ascertain SME differently. The government of Bangladesh has categorized SME into two ample classes (a) accomplishment action and (b) non accomplishment activities. Accomplishment enterprises can be disconnected into two categories (a) Baby action and (b) Boilerplate enterprise. Non-manufacturing activities additionally can be disconnected into two categories (a) Baby action and (b) Boilerplate enterprise. According to Bangladesh Bureau of Statistics altered enterprises are authentic as Micro industry that cardinal of advisers is 0-9, baby has 10-49 employees, Boilerplate has 50-99 advisers and Ample aloft 99 employees. To complete this appointment we accept calm abstracts from the accessory antecedent such as internet, books, annual etc. The objectives of the abstraction are to adjudge the present bearings of SME in Bangladesh, to assay the problems of SME in Bangladesh and acclaim solutions to affected the problems. Small and Boilerplate Enterprises (SMEs), by bearing exportable surpluses of bolt calm with bounded amount additions and conception of application opportunities, can accomplish cogent accession to the abridgement of Bangladesh. Although costs of SMEs in off-farm rural bread-and-butter activities are abundantly abased on disinterestedness costs from claimed and ancestors savings, currently banks and banking institutions are additionally advancing avant-garde to accommodate accounts to this sector. As the ample abeyant of application bearing by SMEs has admiring assimilation of the action makers, a ambit of initiatives for channeling loans to SMEs are actuality taken. The Government has taken up programs to accommodate banking abetment to aggrandize SMEs through bartering banks. Alongside the amount of loans, back FY2004-05, Bangladesh Coffer has taken up a adjustment of Tk. 100 crore for refinancing the appointed banks and banking institutions as revolving fund. Recently, the adjustment has been widened with an added allocation of Tk. 600 crore. Up to June 2009, Tk. 716. 44 crore and up to December 2009 Tk. 853. 15 has been disbursed amid 17 appointed banks and 21financial institutions for refinancing abeyant entrepreneurs. In accession to this, IDA has provided US$10 actor and the Government of Bangladesh has provided Tk. 112. 32 crore through ‘Enterprises Advance and Coffer Addition Project (EGBMP)’. With the assured revolving armamentarium of Tk. 224. 50 crore up to June 2009 and Tk. 244. 14 crore up to December 2009 refinancing accessories amid 2541 abeyant entrepreneurs accept been provided to 15 agenda banks and 14 banking institutions. Moreover, in an attack to accommodate incentives to the sector, ADB has been accouterment an added US$30 actor to Bangladesh Coffer and Tk. 34. 94 up to December 2009 refinancing accessories amid 3264 abeyant entrepreneurs accept been provided to 9 agenda banks and 7 banking institutions. These assets would accord both in application bearing as able-bodied as in acceptable the purchasing adeptness of the poor. It is begin that micro enterprises run by up to 10 workers accord the best which is 86% of the absolute accession from SMEs to GDP of Bangladesh. It is additionally empiric that micro enterprises run by added than 21 workers accord about 7% of absolute accession from SME to GDP of Bangladesh. It is reflected from the table that accomplishment breadth contributes the accomplished accession in GDP i. e. , 38%. It is additionally empiric from the table that agronomics and ample and retail breadth accord added than 22 percent in the GDP of Bangladesh. We additionally appearance the advance adjustment of SME. It is empiric that during 2001-2002 to 2004-2005 in every banking year the advance amount of SME is about 7%. In 2005-2006 the advance amount was 9. 21%. The accomplished advance was in 2006-2007 i. e. 10. 28%. Quantum Index of Assembly for Boilerplate to Ample Calibration Accomplishment Industries in 2009-10 is 431. 51. We additionally begin some aloft problems these are Resource scarcity, Aerial agent turnover, Absence of avant-garde technology, Poor concrete infrastructure, Banking constraints, Abridgement of compatible definition, Abridgement of information, Abridgement of entrepreneurship skills, Participation of women entrepreneurs, Admission to Bazaar and abridgement of acquaintance apropos the accent of business tool, Bureaucracy, Absence of cellophane acknowledged system, Abridgement of charge to accession and chump satisfaction, Abridgement of affection assurance, Abridgement of assay and development facilities, Angry antagonism with the cheaper adopted goods. We additionally accommodate some advocacy that acknowledgment in the Advocacy chapter. At aftermost we cessation our appointment on the cessation chapter. Baby and boilerplate enterprises (SMEs) act as a basic amateur for the bread-and-butter growth, abjection advance and accelerated industrialization of the developing countries like Bangladesh. SMEs are cogent in basal country’s bread-and-butter growth, application bearing and accelerated industrialization. Government of Bangladesh has accent the accent of SME in the Automated Policy-2005. SME has articular by the Ministry of Industries as a ‘thrust sector’. As the SME breadth is activity intensive, it can actualize added application opportunities. For this acumen government of Bangladesh has accustomed SME as a abjection advance tool. SME additionally advance the development of ambitious abilities and innovation. Along with abjection advance SME can abate the burghal clearing and added banknote breeze in rural areas. As a aftereffect it will enhance the accustomed of active in rural areas. Achievement of SMEs in Bangladesh is decidedly begin beneath the akin of all-embracing standard. Although government of Bangladesh has taken some action to ensure the advance of SME but those accomplish are not abundant at all. Keywords: SME, Finance, Employee, Basic Table of Contents Contents Pages Title Fly……………………………………………………………………………………. 1 Title Page………………………………………………………………………………... …2 Letter of Transmittal…………………………………………………………………. ……. 3 Acknowledgement…………………………………………………………………………4 Executive Summary……………………………………………………………………… (5-7) Table of Contents……………………………………………………………………………8 Affiliate Name Chapter 1 Introduction…………………………………………………………………………… (9-15) Affiliate 2 Methodology………………………………………………………………………………16 Affiliate 3 Assay and Interpret Data……………………………………………………. ……… (17-27) Affiliate 4 Allegation and Results………………………………………………………. ……......... (28-30) Affiliate 5 Recommendations…………………………………………………………………... … (31-32) Affiliate 6 Conclusion………………………………………………………………………………. ….. 33 References……………………………………………………………………………………34 Affiliate 1 Introduction Bangladesh is a developing country. Its per capita assets is actual low and its $750 and per capita GDP is $684. Its present GDP is 6%. Bangladesh bread-and-butter review, 2009-10) Best of the bodies are active in the beneath of abjection line. Abjection is the basic botheration of our country. To abolish abjection government has taken abounding accomplish such as Millennium Advance Goals, autograph Abjection Abridgement Action Cardboard (PRSP) etc. To accomplish the committed Millennium Development Goals (MDGs) of 2015 or the targets of the Civic Action for Bread-and-butter Growth, Abjection Abridgement and Social Development, frequently accustomed as the Abjection Abridgement Action Cardboard (PRSP), the development action of Bangladesh charge strive to aggrandize application conception opportunities actual rapidly. The MDGs reflect the accomplishments and targets independent in the Millennium Declaration that was adopted by 189 nations during the UN Millennium Summit in September 2000. Bangladesh has fabricated noteworthy advance in the accomplishment of MDGs during 1990-2000. Bangladesh advance appear MDGs is axiomatic in animal development, for archetype accomplishment of gender adequation in primary and accessory academy enrolment. Mid-way through to the 2015 ambition of MDGs attainment, Bangladesh has covered cogent breadth and can cautiously be said to be on clue in affiliation to best of the targets. A midterm assay of advance at the accumulated akin shows that Bangladesh is authoritative accelerating strides in abbreviation poverty, already bringing bottomward the abjection gap adjustment to 9 adjoin 2015 ambition of 8 with the amount of abjection abridgement actuality 1. 34 percent in affiliation to the adapted amount of 1. 23 percent. The basic goals are as following: Goal 1: Eradicate Acute Abjection and Ache Goal 2: Accomplish Universal Primary Education Goal 3: Advance gender disinterestedness and Empower women Goal 4: Abate Child Bloodshed Goal 5: Advance Maternal Health Goal 6: Combat HIV/AIDS, malaria and alternative diseases Goal 7: Ensure ecology sustainability Goal 8: Advance a all-around affiliation for development The ambit of added assimilation of activity in agronomics actuality somewhat limited, the best abeyant for this lies in the accomplishment sector. To actualize job amplitude government founded SME Foundation that accommodate accommodation and advice to accustomed baby and boilerplate enterprise. In the ambience of Bangladesh, the development of Baby and Boilerplate Enterprises (SMEs) can be advised as a basic apparatus for abjection advance and ensure the accelerated industrialization. In this cardboard we accept approved to assay the problems of SMEs of Bangladesh. The achievement of SMEs of Bangladesh abnormally in agreement of agent about-face rate, affection assurance, allocation of funds, business activities accept been begin decidedly beneath the all-embracing standard. The breadth gets negligible abutment from government. The amount of development of SME is not up to the expectation. In adjustment to affected the problems a few suggestions for the development of SMEs are accustomed by us. 1. 1 Ambit and Delimitation of the Abstraction This affair SMEs is a actual important in the ambience of Bangladesh. It advice us the accumulate activated acquaintance and we are to apperceive that the role of SMEs, Problems, -to-be and their solution. But we accept some limitation; it is we are calm abstracts from accessory source, basically internet using. We do not conduct face to face annual because, time was not abundant for us to adapt this assignment. If we got abundant time we anticipate it will be advice to adapt our assignment. 1. 2 Objectives of the Abstraction In this cardboard we accept approved to assay the factors that admission the development and advance of the SME breadth of Bangladesh. Thus the specific bjectives of the abstraction are as follows: * To adjudge the present bearings of SME in Bangladesh. * To assay the problems of SME in Bangladesh. * To acclaim solutions to affected the problems. 1. 3 SME Analogue SME: about the apple According to the European Union (2003) SMEs are authentic as enterprises which accept at best 250 advisers and an anniversary about-face not beyond 50 actor Euros. Added there is the acumen of baby enterprises — they accept beneath than 50 agents associates and beneath than 10 actor Euros about-face — and micro-enterprises (less than 10 bodies and 2 actor Euros turnover). According to the Apple Coffer (2006) boilerplate enterprises are authentic as enterprises which accept at best 300 advisers and an anniversary about-face not beyond 15 actor US dollars. Added there is the acumen of baby enterprises — they accept beneath than 50 agents associates and up to 3 actor US dollars about-face — and micro-enterprises accept up to 10 bodies and $100,000 turnover. In the UK, sections 382 and 465 of the Companies Act 2006 ascertain a SME for the purpose of accounting requirements. According to this a baby aggregation is one that has a about-face of not added than ? . 6 million, a antithesis breadth absolute of not added than ? 2. 8 actor and not added than 50 employees. A medium-sized aggregation has a about-face of not added than ? 22. 8 million, a antithesis breadth absolute of not added than ? 11. 4 actor and not added than 250 employees. It is annual acquainted that alike aural the UK this analogue is not universally applied. In the USA, the analogue of baby business is set by a government administration alleged the Baby Business Administration (SBA) Admeasurement Standards Office. The SBA uses the appellation “size standards” to announce the bigger a affair can be in adjustment to still be advised a baby business, and accordingly able to annual from baby business targeted funding. The affair cannot be ascendant in its field, on a civic basis. It charge additionally be apart endemic and operated. Unlike the UK and the European Union which accept simple definitions activated to all industries, the US has called to set admeasurement standards for anniversary alone NAICS coded industry. This aberration is advised to reflect industry differences in a bigger way. The ost accustomed admeasurement standards are 500 advisers for best accomplishment and mining industries 100 advisers for ample barter industries $6 actor of anniversary receipts for best retail and annual industries $28. 5 actor of anniversary receipts for best accustomed & abundant architecture industries $12 actor of receipts for all adapted barter contractors $0. 75 actor of receipts for best agronomical industries. Breaking bottomward the SME definition, Industry Canada defines a baby business as one that has beneath than 100 advisers (if the business is a goods-producing business) or beneath than 50 advisers (if the business is a service-based business). A abutting that has added advisers than these cut-offs but beneath than 500 advisers is classified as a medium-sized business. (www. about. com) In India the Baby Calibration Industries (SSIs) are automated adventure in which the advance in anchored assets in bulb and machinery, whether captivated on buying agreement or on charter or by appoint acquirement does not beat Rs. 10 million. The Baby Calibration Annual And Business (Industry related) Enterprises (SSSBEs) are industry accompanying annual and business enterprises with advance in anchored assets, excluding acreage and architecture up to Ps. million. (Ministry of barter and Industry, Government of India) According to the SME coffer of Pakistan, SME agency an entity, alluringly not a accessible bound company, which does not apply added than 205 bodies (if it is accomplishment concern) and 50 bodies (if it is trading/service concern) and additionally fulfils the afterward belief of either ‘a’ and ‘c’ and ‘c’ or ‘b’ and ‘c’ as relevant; (a) A trading/service affair with absolute assets at amount excluding acreage and barrio up to Rs 50 million. b) A accomplishment affair with absolute assets at excluding acreage and barrio up to Rs 100 million. (c) Any affair (trading, annual or manufacturing) with net sales not beyond Rs 300 actor as per latest banking statements. 1. 4 SME in Bangladesh Altered countries and organizations ascertain SME differently. The Government of Bangladesh has categorized SME into two ample classes 1. Accomplishment action 2. Non Accomplishment activities Manufacturing enterprise: Accomplishment enterprises can be disconnected into two categories; 1. Baby enterprise: Baby action is an action would be advised as baby if, in accustomed bazaar prices, the backup amount of plant, accouterment and alternative parts/components, fixtures, abutment utility, and associated abstruse casework by way of capitalized costs (of turn-key consultancy services, for example), etc, excluding acreage and building, were to up to Tk. 15 million. 2. Medium enterprise: Boilerplate action an action would be advised as boilerplate if, in accustomed bazaar prices, the backup amount of plant, accouterment and alternative parts/components, fixtures, abutment utility, and associated abstruse casework by way of capitalized costs (of turn-key consultancy services, for example), etc, excluding acreage and building, were to up to Tk. 100 million. Non-manufacturing activities (such as trading or alternative services): Non-manufacturing activities can be disconnected into two categories; 1. Small enterprise: Baby action is an action should be advised as baby if it has beneath than 25 workers, in full-time equivalents. 2. Boilerplate enterprise: Boilerplate action an action should be advised as baby if it has amid 25 and 100 employees. According to Bangladesh Bureau of Statistics altered enterprises are authentic as: Name of Industry| No. of employees| Micro| 0-9| Small| 10-49| Medium| 50-99| Large| Aloft 99| The Ministry of Industries, Government of Bangladesh has been articular afterward 11 booster sectors: 1. Electronics and electrical 2. Software-development 3. Light engineering and metal-working 4. Agro-processing/agro-business/plantation agriculture/ specialist farming/tissue-culture 5. Leather-making and covering appurtenances 6. Knitwear and banal apparel 7. Plastics and alternative bolt 8. Healthcare & affection 9. Educational casework 10. Pharmaceuticals/cosmetics/toiletries 11. Fashion-rich claimed effects, abrasion and burning goods. 1. 5 Abstract Review With annual to the SME breadth of Bangladesh, adopted and civic experts undertook some studies. Some of the notable ones are; Uddin (2008), Chowdhury (2007), Miah (2007), Ahmed (2006), MIDAS (2004), ICG (2003), Hallberg (2002). Uddin (2008) has declared that the bread-and-butter adeptness and all-embracing achievement of the SMEs abnormally in the developing countries are appreciably abased aloft macroeconomic action ambiance and specific advance behavior pursued for their benefit. Chowdhury (2007) accent that in ambience of Bangladesh SME is characterized by Low assets and bound assets, bounded assortment and aerial mortality, poor acclaim knowledge, actual bound admission to academic antecedent of credit, banknote acuteness in transactions, actual bound almanac befitting habit, poor banking acknowledgment on annual of tax issues, aerial accident acumen has led to aerial borrowing costs. In a abstraction about SME breadth of Bangladesh Miah (2007) declared that the aloft constraints for SMEs are abridgement of able investment, abridgement of avant-garde technology, aerial amount of absorption on coffer loans, irregular/inadequate accumulation of power, poor concrete basement and aerial busline cost, poor advice about bazaar opportunities and requirements, bare availability of raw materials, abridgement of accomplished technicians and workers, abridgement of assay & development facilities, angry competition, absence of able and cellophane acknowledged system, difficulties in accessing technology, acclaim constraints, low admission to business services, coercion of affection of animal resources, low awareness, low lobbying capacity, accelerated changes in action environment. Ahmed (2006) empiric that availability of accounts is a aloft coercion to accumulation and advance of SMEs in Bangladesh. Banks are afraid to aggrandize their SME acclaim portfolio because they do not accede SME lending an adorable and assisting undertaking. This is so because SMEs are admired as aerial accident borrowers because of their low capitalization, bereft assets and their disability to accede with accessory requirements of the banks. Administrative costs are additionally college because abutting ecology and administration the SME operation becomes necessary. A abstraction (2004) by Micro Industries Development Abetment and Casework (MIDAS) appear that sources of accounts are mostly accompany and ancestors affiliate in case of SME. MIDAS approved to assay the sources of funds of SMEs. These are: Table-1: Assay Aftereffect of MIDAS Antecedent of Funds| Allotment of Finance| Breezy sector| 41%| Family members| 20% (interest free)| 4% (with interest)| | NGO| 17%| Bank| 18%| According to Hallberg (2002), a abiding macro-economy, an accessible barter and advance regime, and a aggressive banking breadth are argued to be best basic capacity for a active clandestine sector. But with a law and adjustment bearings beneath the optimum level, bribery able-bodied aloft the akin of accepting and ambiguous political situation, the calm ambiance of Bangladesh does not appear to any help, rather hinders the abundance of SME in this country. Affiliate 2 Methodology This is basically a library research. Best of the abstracts accept been calm from accessory sources. So the assay appointment has been based on appear advice and abstracts accessible in any anatomy such as books, journals, magazines, newspapers etc. adherent to SME sector. Accessory advice has been calm from Ministry of Industries, SME foundation, Bangladesh Bureau of Statistics, MIDAS, and Banking Institutions and from alternative SME accompanying organizations. Relevant accessories and abstract in this ambience has additionally consulted. In this commodity we accept analyzed the abstracts of aftermost six years of SMEs of Bangladesh. We accept approved to assay the performances of SMEs by applying simple statistical assay i. e. , advance percentage, boilerplate etc. Affiliate 3 Assay and Interpret Abstracts 3. Baby and Boilerplate Enterprises (SMEs) Baby and Boilerplate Enterprises (SMEs), by bearing exportable surpluses of bolt calm with bounded amount additions and conception of application opportunities, can accomplish cogent accession to the abridgement of Bangladesh. Although costs of SMEs in off-farm rural bread-and-butter activities are abundantly abased on disinterestedness costs from claimed and ancestors savings, currently banks and banking institutions are additionally advancing avant-garde to accommodate accounts to this sector. As the ample abeyant of application bearing by SMEs has admiring assimilation of the action makers, a ambit of initiatives for channeling loans to SMEs are actuality taken. The Government has taken up programs to accommodate banking abetment to aggrandize SMEs through bartering banks. Alongside the amount of loans, back FY2004-05, Bangladesh Coffer has taken up a adjustment of Tk. 100 crore for refinancing the appointed banks and banking institutions as revolving fund. Recently, the adjustment has been widened with an added allocation of Tk. 600 crore. Up to June 2009, Tk. 716. 44 crore and up to December 2009 Tk. 853. 15 has been disbursed amid 17 appointed banks and 21financial institutions for refinancing abeyant entrepreneurs. In accession to this, IDA has provided US$10 actor and the Government of Bangladesh has provided Tk. 112. 32 crore through ‘Enterprises Advance and Coffer Addition Project (EGBMP)’. With the assured revolving armamentarium of Tk. 224. 50 crore up to June 2009 and Tk. 244. 14 crore up to December 2009 refinancing accessories amid 2541 abeyant entrepreneurs accept been provided to 15 agenda banks and 14 banking institutions. Moreover, in an attack to accommodate incentives to the sector, ADB has been accouterment an added US$30 actor to Bangladesh Coffer and Tk. 334. 94 up to December 2009 refinancing accessories amid 3264 abeyant entrepreneurs accept been provided to 9 agenda banks and 7 banking institutions. These assets would accord both in application bearing as able-bodied as in acceptable the purchasing adeptness of the poor. Detailed refinancing of Bangladesh Coffer to assorted banking institutions and banks is apparent at Table. Table-2: Summary Advice on SME refinancing (up to June 2009)* Refinancing Source| Amount refinanced (in crore Taka)| No. of Beneficiary Enterprises| | Alive Capital| Mid Appellation Loan| Long Appellation Loan| Absolute loan| Automated Loan| Bartering Loan| Service| Total| Bangladesh Bank| 178. 48| 336. 40| 201. 56| 716. 44| 1724| 4150| 1127| 7001| IDA| 61. 51| 96. 40| 66. 59| 224. 50| 899| 1220| 358| 2477| ADB| 138. 68| 112. 82| 52. 75| 304. 25| 728| 1864| 331| 2923| Total| 378. 68| 545. 62| 320. 90| 1245. 20| 3351| 7234| 1816| 12401| (*Source: Bangladesh Bread-and-butter Assay 2008-0, Affiliate 8, Industry) Table-3: Summary Advice on SME Refinancing from Bangladesh Coffer (up to June 2009)* (*Source: Bangladesh Bread-and-butter Assay 2009-2010) Table-4: Summary advice on SME Refinancing from IDA (up to June 2009)* (*Source: Bangladesh Coffer & Bangladesh Bread-and-butter Assay 2009-2010) Table-5: Summary Advice on SME Refinancing from ADB (up to June 2009)* *(Source: Bangladesh Coffer & Bangladesh Bread-and-butter Assay 2010) Table 8. 3 shows that up to June 2009, Bangladesh Coffer and IDA accept broadcast Tk. 940. 94 crore as refinancing to 17 banks and 22 non-bank banking institutions. It may be mentioned that the armamentarium has been disbursed (by the mentioned banks and banking institutions) to a absolute of 9478 SMEs beforehand as loan. Out of the absolute loan, Tk. 239. 9 crore has been provided as alive capital, Tk. 432. 79 crore as medium-term accommodation and Tk. 268. 15 crore as abiding loan. Table-6: Summary Advice on SME refinancing (up to 31, March 2010)* | RefinancingSource| Amount of Refinancing (In Tk. Crore)| Cardinal of costs action (Sector wise)| | | Alive capital| Mid appellation loan| Long appellation loan| Absolute loan| Automated loan| Bartering loan| Service| Total| 1. | Bangladesh Coffer Fund| 224. 80| 493. 79| 235. 70| 954. 28| 2443| 5844| 1537| 9824| 2| IDA Fund| 63. 71| 100. 74| 87. 26| 251. 71| 924| 1258| 402| 2584| 3| ADB Fund| 144. 48| 132. 27| 58. 19| 334. 94| 800| 2096| 368| 3264| | Total| 432. 99| 726. 80| 381. 15| 1540. 8| 4167| 9198| 2307| 15672| *(Source: Bangladesh Coffer & Bangladesh Bread-and-butter Assay 2009-10, Affiliate 8, Industry) Table-7: Summary advice on SME Refinancing from Bangladesh Coffer (up to June 2010)* | Name of Banks/FIs Refinanced| Amount of Refinancing (In Tk. Crore)| No. of Beneficiary enterprises (Sector wise)| | | Alive capital| Mid appellation loan| Long appellation loan| Absolute loan| Automated loan| Bartering loan| Service| Total| 1. | Clandestine banks(17)| 201. 43| 226. 43| 65. 98| 493. 84| 1257| 4469| 562| 6288| 2| Costs Institutes (22)| 23. 37| 267. 35| 169. 72| 460. 45| 1186| 1375| 975| 3536| | Total| 224. 80| 493. 79| 235. 70| 954. 8| 2883| 5844| 1537| 9824| *(Source: Bangladesh Coffer & Bangladesh Bread-and-butter Assay 2009-10, Affiliate 8, Industry) Table-8: Summary advice on SME Refinancing from IDA (Up to June 2010)* | Name of Banks/FIs Refinanced| Amount of Refinancing (In Tk. Crore)| No. of Beneficiary enterprises (Sector wise)| | | Alive capital| Mid appellation loan| Long appellation loan| Absolute loan| Automated loan| Bartering loan| Service| Total| 1. | Clandestine banks(15)| 57. 48| 67. 07| 24. 73| 149. 27| 688| 1167| 79| 1934| 2| Costs Institutes (14)| 6. 23| 33. 67| 62. 53| 102. 44| 236| 91| 323| 650| | Total| 63. 71| 100. 74| 87. 26| 251. 71| 924| 1258| 402| 2584| *(Source: Bangladesh Coffer & Bangladesh Bread-and-butter Assay 2009-10, Affiliate 8, Industry) Table-9: Summary advice on SME Refinancing from ADB (Up to June 2010)* | Name of Banks/FIs Refinanced| Amount of Refinancing (In Tk. Crore)| No. of Beneficiary enterprises (Sector wise)| | | Alive capital| Mid appellation loan| Long appellation loan| Absolute loan| Automated loan| Bartering loan| Service| Total| 1. | Clandestine banks(9)| 144. 32| 90. 95| 34. 17| 269. 44| 657| 1893| 155| 2705| 2| Costs Institutes (7)| 0. 16| 41. 32| 24. 02| 65. 50| 143| 203| 213| 559| | Total| 144. 48| 132. 27| 58. 19| 334. 94| 800| 2096| 368| 3268| *(Source: Bangladesh Coffer & Bangladesh Bread-and-butter Assay 2009-10, Affiliate 8, Industry) Table 8. 3 shows that up to March 2010, Bangladesh Coffer and IDA accept broadcast Tk. 1205. 99 crore as refinancing to 17 banks and 22 non-bank banking institutions. It may be mentioned that the armamentarium has been disbursed (by the mentioned banks and banking institutions) to a absolute of 12408 SMEs beforehand as loan. Out of the absolute loan, Tk. 272. 70 crore has been provided as alive capital, Tk. 519. 79 crore as medium-term accommodation and Tk. 304. 80 crore as abiding loan. 3. 2 Present Scenario of SME In 2003 the All-embracing Consultancy Group (ICG) of the UK, in accord with the Micro Industries Development Abetment and Casework (MIDAS), conducted the Civic Clandestine Breadth Assay of Enterprises in Bangladesh. The assay after-effects drew the cessation that there were about 6 actor Baby and Boilerplate Enterprises (SMEs), which included enterprises with p to 100 workers employing a absolute of 31 actor people, agnate to 40 per cent of the citizenry of the country of age 15 years and above. The assay additionally begin that the automated anatomy of SMEs consisted of primarily ample and retail barter and aliment (40 per cent), assembly and auction of agronomical appurtenances (22 percent), casework (15 percent), and accomplishment alone (14 per cent). Thus the assay brought out the actuality that the ample beginning abeyant for amplification in accomplish and assembly could be exploited (or accidental added decidedly to the civic economy. Another basic allegation of the assay beneath altercation was that SMEs contributed BDT 741 ($ 12. 5) billion i. e. aboriginal 25 per cent of the GDP (BDT 2,996 billion) in 2003. It is reflected from this assay that enterprises employing 2-5 workers accord 51 percent allotment of the absolute SME accession to the economy, followed by 26 percent by those accepting alone one artisan and 10 per cent by those accepting 6-10 workers. For LDCs like Bangladesh, SMEs are a awful cost-effective avenue for automated development. It is empiric from Table-1 that micro enterprises run by up to 10 workers accord the best which is 86% of the absolute accession from SMEs to GDP of Bangladesh. It is additionally empiric that micro enterprises run by added than 21 workers accord about 7% of absolute accession from SME to GDP of Bangladesh. Table-10: Sectors astute accession of SME in GDP of Bangladesh (Taka)* Sectors| Absolute accession to GDP (Taka)| Percent of absolute Contribution| Agriculture| 177,729,637,637| 24%| Fishing| 32,872,674,464| 4%| Manufacturing| 282,344,700,575| 38%| Construction| 7,196,460,200| 1%| Ample and Retail barter and Repairs| 171,335,861,390| 23%| Hotels and restaurants| 28,599,263,975| 3%| Transport, Storage and Communication| 8,950,171,356| 1%| Real state, Renting and Business activities| 13,771,436,794| 2%| Education| 151,808,506| 1%| Health and Social work| 2,743,049,893| 1%| Others Annual activities| 15,632,094,785| 2%| Total| 741,327,159,609| 100%| (Source: ICG/MIDAS Survey, 2004) Figure-1: Breadth astute accession of SME in GDP of Bangladesh Table & blueprint 2; provides the advice apropos breadth astute accession of SMEs to GDP. It is reflected from the table that accomplishment breadth contributes the accomplished accession in GDP i. e. , 38%. It is additionally empiric from the table that agronomics and ample and retail breadth accord added than 22 percent in the GDP of Bangladesh. Table-11: Advance adjustment of SME* Year| Advance amount of Ample & Boilerplate enterprise| Advance amount of Baby enterprise| 1999-00| 4. 35%| 5. 80%| 2000-01| 6. 55%| 7. 02%| 2001-02| 4. 60%| 7. 69%| 2002-03| 6. 56%| 7. 21%| 003-04| 6. 95%| 7. 45%| 2004-05| 8. 30%| 7. 93%| 2005-06| 11. 41%| 9. 21%| 2006-07| 9. 74%| 9. 69%| 2007-08| 7. 26%| 7. 10%| 2008-09| 6. 58%| 6. 90%| 2009-10| 5. 64%| 6. 61%| *(Source: Bangladesh Bread-and-butter Assay 2009-2010, Affiliate -8, Industry) Figure-2: Advance amount of SMEs Table 3 shows the advance adjustment of SME. It is empiric that during 2001-2002 to 2004-2005 in every banking year the advance amount of SME is about 7%. In 2005-2006 the advance amount was 9. 21%. The accomplished advance was in 2006-2007 i. e. 10. 28%. Table-12: Advance adjustment of Accomplishment Breadth * Year| Advance allotment of Accomplishment Sector| 1999-00| 4. 76%| 2000-01| 6. 68| 001-02| 5. 48| 2002-03| 6. 75| 2003-04| 7. 10| 2004-05| 8. 19| 2005-06| 10. 77| 2006-07| 9. 72| 2007-08| 7. 21| 2008-09| 6. 68| 2009-10| 5. 92| *(Source: Bangladesh Bread-and-butter Assay 2009-2010, Affiliate -8, Industry) Figure-3: Advance amount of Accomplishment Breadth Table shows the advance adjustment of accomplishment sector. It is empiric that the boilerplate advance during 1972 to 2005 was 6. 4%. During 2001-2002 to 2006-2007 the accomplished advance was in year 2006-07 i. e. , 11. 19%. It is additionally empiric that during 2002-2003 to 2005-2006 in every banking year the advance of accomplishment breadth was added than 6%. Table-13: Admeasurement and Advance Amount of Accomplishment Sector* At connected prices of 1995-96) (Taka in Core) Year| Ample & Boilerplate enterprise| Baby enterprise| Absolute manufacturing| 1999-00| 21709| 8659| 30368| 2000-01| 23130| 9267| 32398| 2001-02| 24194| 9980| 34174| 2002-03| 25781| 10700| 36481| 2003-08| 27572| 11897| 39069| 2004-05| 29861| 12409| 42269| 2005-06| 33268| 13552| 46820| 2006-07| 36507| 14865| 51372| 2007-08| 39157| 15920| 55077| 2008-09| 41735| 17019| 58754| 2009-10| 44087| 18144| 62232| *(Source: Bangladesh Bread-and-butter Assay 2009-2010, Affiliate -8, Industry) Table-14: Quantum Index of Assembly for Boilerplate to Ample Calibration Accomplishment Industries* FY2000-01 to FY2008-09 (1988-89=100) Medium to ample calibration industries| 2000-01| 2001-02| 2002-03| 2003-04| 2004-05| 2005-06| 2006-07| 2007-08| 2008-09| 2009-10 (Up to October, 09)| | 228. 43| 238. 75| 254. 45| 272. 13| 294. 72| 328. 35| 360. 33| 384. 82| 413. 42| 431. 51| *(Source: Bangladesh Bread-and-butter Assay 2009-2010, Affiliate -8, Industry) Affiliate 4 Allegation and After-effects At present SME breadth is adverse a lot of problems in Bangladesh. Some aloft problems are as follows: 1. Resource scarcity: In Bangladesh absence of raw abstracts arrest the adeptness of SME to be consign aggressive and banned its adeptness to adeptness added avant-garde stages of all-embracing business. 2. Aerial agent turnover: Due to bound advance of SME best of the accomplished advisers leave SMEs. Levy (2003) empiric that SMEs are adeptness creators but poor at adeptness retention. 3. Absence of avant-garde technology: One of the basic barriers for the development of SME in Bangladesh is bare technologies. Abounding SMEs accept bootless to accept avant-garde technology. 4. Poor concrete infrastructure: Bare accumulation of all-important utilities like electricity, water, anchorage and highways arrest the advance of SME sector. Moreover abortive bounded altitude admission the busline cost. 5. Banking constraints: Availability of accounts hinders the advance of SMEs in Bangladesh. Bangladeshi coffer considers SMEs as aerial accident borrowers because of their disability to accede with the bank’s accessory requirements. Only about 15-20% of the owners of SMEs own any adamant property. Bankers affair accommodation on the base of buying of adamant acreage as accessory risk. As a aftereffect it automatically excludes blow 80% SME’s from the account of advantaged audience of the banks. Whatever accessory SME’s can administer gets acclimated up in talking the appellation accommodation abrogation them with no agency to seek alive basic loans from banks. Because of low admission to institutional costs SME’s await on inefficient costs casework from breezy sources. 6. Abridgement of compatible definition: In Bangladesh the analogue of SME has afflicted overtime in altered automated action appear by the government in altered year. Absence of compatible analogue makes the conception and accomplishing of SME action difficult. 7. Abridgement of information: Miah (2006) has empiric that SMEs accept actual bound use of advice technology (IT). Accounting amalgamation is acclimated by 1-2% of the SMEs. The use of computers is appear by say 15% of the SMEs, while the use of the Internet for business purposes applies to say 8-10% of SMEs. 8. Abridgement of entrepreneurship skills: Conservative attitude appear risk, abridgement of vision, adeptness to accomplish plan and implementing those arrest the advance of SME in Bangladesh. 9. Participation of women entrepreneurs: Equality of befalling is a aloft botheration for SME. Female entrepreneurs are advised discriminately. They are not able-bodied represented in business organization. Government does not accommodate able institutional abetment for women entrepreneurs. 10. Admission to Bazaar and abridgement of acquaintance apropos the accent of business tool: For SME, attributable a retail amplitude is actual big-ticket in the aloft cities in Bangladesh. As a aftereffect abounding barter are not absorbed to buy articles and casework from SMEs. Because they can’t adjudicator the affection until they physically advised the product. Best of the cases SMEs in Bangladesh are not able to use the Chip Business Communication (IMC) tools. But these accoutrement comedy the role of important bang to actuate the barter and absorb them. The country does not accept abundant business adequacy and assets to advance in marketing. 11. Bureaucracy: Wang (1995) empiric that the bare government supports are top baronial constraints for SMEs. Accidental layers of Bureaucracy and red-taps abate the competitiveness of SME and adopting the amount of affairs and operations. 12. Absence of cellophane acknowledged system: The absence of an able and cellophane acknowledged adjustment discourages SMEs in exploring into chancy ventures of business. There are a cardinal of accidental academic requirements to alpha and run business that actualize aerial acquiescence costs and become barriers to SME development, advance and bazaar entry. 13. Lack of charge to accession and chump satisfaction: Ernesto (2005) declared that to accumulate in clip with all-embracing competition, firms of all admeasurement are challenged to advance and innovate their articles processes constantly. But in Bangladesh SMEs are still not apropos the accent of acceptable and application barter by alms atypical and adapted benefits. 14. Abridgement of affection assurance: Govt. has bootless to anatomy a civic affection policy, accommodate able abutment systems and authorize a civic affection accepting authority. As a aftereffect SME of Bangladesh has bootless to ensure the affection of their articles and casework both in bounded and all-embracing market. 15. Abridgement of assay and development facilities: It is empiric that advance in R&D is still negligible in. 16. Fierce antagonism with the cheaper adopted goods: Angry antagonism with the cheaper appurtenances of China, Taiwan, Korea, India, and Thailand additionally affectation blackmail to SME in Bangladesh. Affiliate 5 Recommendations In adjustment to affected the aloft mentioned problems the afterward suggestions are recommended; 1. Government charge accept to booty able measures to ensure the ceaseless accumulation of raw abstracts for SME. 2. Government needs to booty adapted measures to fix the minimum salary/wages of the advisers of SME. That will advice to abbreviate the agent turnover. 3. Government and banking academy may accommodate able accounts for addition and abstruse advancement. 4. Development of basement is basic for the optimum advance of SME. So government of Bangladesh needs to booty adapted action action for the basement development of Bangladesh. 5. Government, banking institutions and Non Government Organizations (NGOs) may booty all-important accomplish to ensure ceaseless banking abutment to the -to-be SMEs in Bangladesh. 6. Due to the absence of compatible analogue the action conception and implementations are not possible. Government should booty action to advance a compatible analogue of anniversary class of SMEs. 7. Govt. of Bangladesh should booty the action to advance web pages alone for SME and an chip SME database. It will abate the barriers to SME admission to all-around market. 8. In adjustment to ensure the assimilation of accomplished workforce the government should accomplish the ambitious career adorable by aspersing the uncertainty. 9. In adjustment to animate women entrepreneurship govt. may; absorb women entrepreneurs in action conception and implementation. Arrange funds for women entrepreneurs. Accommodate all-important training to women entrepreneurs in rural and burghal breadth of Bangladesh. 10. SME foundation may booty adapted business accoutrement to popularize their products. 11. For aspersing red tapes and accelerating the advance of SME government may accommodate one roof annual beneath the SME foundation. 12. Appropriate acknowledged framework is all-important to ensure the development of SME of Bangladesh. 13. In this era of acute antagonism connected planning and affection advance act as a prerequisite for the adaptation of SMEs. In adjustment to advance the affection SMEs can chase the Just in Time (JIT) aesthetics and use Absolute Affection Management (TQM) and can ensure the advance of affection and abundance at a time. 14. Government should authorize a aboveboard accepting ascendancy abnormally for SMEs. So that this breadth can access a abstruse appraisal of the affection of their articles aural a beeline accessible time. The accepting of the ascendancy should be apple advanced accepted. Govt. ay additionally accommodate abetment to SMEs during the accepting action and advance the accent of artefact accepting for all-embracing accepting amid the SMEs. 15. Assay and Development (R&D) is charge for the development and advance of SME. So government charge accept to advance in R&D for ensuring the accession of SME of Bangladesh. 16. Restriction may be imposed on acceptation of SMEs’ articles which are accessible in Bangladesh. Affiliate 6 Cessation Baby and boilerplate enterprises (SMEs) act as a basic amateur for the bread-and-butter growth, abjection advance and accelerated industrialization of the developing countries like Bangladesh. SMEs are cogent in basal country’s bread-and-butter growth, application bearing and accelerated industrialization. Government of Bangladesh has accent the accent of SME in the Automated Policy-2010. SME has articular by the Ministry of Industries as a ‘thrust sector’. As the SME breadth is activity intensive, it can actualize added application opportunities. For this acumen government of Bangladesh has accustomed SME as a abjection advance tool. SME additionally advance the development of ambitious abilities and innovation. Along with abjection advance SME can abate the burghal clearing and added banknote breeze in rural areas. As a aftereffect it will enhance the accustomed of active in rural areas. Achievement of SMEs in Bangladesh is decidedly begin beneath the akin of all-embracing standard. Although government of Bangladesh has taken some action to ensure the advance of SME but those accomplish are not abundant at all. But government shows its absolute attitude appear this sector. Bangladesh government should abide to accord added focuses on some areas, such as adjustment of finance, accommodate basement facilities, anatomy adapted acknowledged framework, authorize civic affection action etc. From the arrangement of our assay it seems that for the bread-and-butter development of Bangladesh SME can comedy a basic role. We are absolutely optimistic that if the aloft mentioned suggestions are implemented again the advance of SME breadth in Bangladesh will be accelerated. References 1. Ahmed, M. U. , Mannan, M. A. , Razzaque, A. , and Sinha, A. (2004). Taking Stock and Charting a Path for SMEs in Bangladesh, Bangladesh Action Institute, Dhaka. 2. Alam, M. S. and Ullah, M. A. (2006). SMEs in Bangladesh and Their Financing: An Assay and Some Reccomendations. The Amount and Management, Vol. 34, No. 3. 3. Hossain, N. (1998). Constraints to SME Development in Bangladesh, Seminar Proceedings, University of Maryland at College Park, USA. 4. Miah, M. A. (2006). Key Success Factors for Civic SME Development Program; Acquaint for OIC Affiliate Countries from Bangladesh Experience, SME Foundation, Dhaka, Bangladesh. 5. Mintoo, A. A. (2006). SMEs in Bangladesh. CACCI Journal, Vol. 1. 6. Address of Asian Development Coffer (ADB). (2002). Strategic Issues and Abeyant Response – Baby and Boilerplate Action Development and Consign Expansion. Asian Development Coffer (ADB), Dhaka. 7. SME Cell. (2005). Action Strategies for Development of SME, Ministry of Industries, Government of People’s Republic of Bangladesh. 8. SME Action Strategies. (2005). Publication of Government of People’s Republic of Bangladesh. 9. Uddin, S. M. N (2008). SME Development and Regional Economics Integration, Seminar Proceedings, Joint Regional Workshop captivated in Tokyo, Japan. 10. Ahmed, Kashfia & Chowdhury, Tanvir Ahmed (2009). Achievement Appraisal of SMEs of Bangladesh, All-embracing Annual of Business and Management, Vol. 4 No. 7.

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