The Present Scenario of Smes in Bangladesh

Assignment On The Introduce Scenario of SMEs in Bangladesh The Declaration Presented to the Gratuity of Duty Administration in Partial Fulfillment of the Requirements for Degree of Bachelor of Duty Administration Submitted To Dr. A K H Helaluz Zaman Guide Pedagogue Gratuity of Business, ASA University Bangladesh (ASAUB) Guide Title: Entrepreneurship Remainder Guide 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 Guide pedagogue Gratuity of Business, ASA University Bangladesh (ASAUB) Subject: Submission of the Group Assignment . Sir, It is our self-indulgence to introduce the declaration on “The Introduce Scenario of SMEs in Bangladesh” as a distribute of our guide "Entrepreneurship Development" We entertain enjoyed preparing this assignment which compensated our usepowerful acquirements of the speculative concept. We trained to heed the usepowerful formational aspects of the mould which is complementary to the speculative messageinateons. Should you need any further advice to evaluate the assignment, it would be our immense self-indulgence to yield you the identical. Sincedepend 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 Preparing this promise Nursing Dissertation on “The Introduce Scenario of SMEs in Bangladesh” was a awful way for our. At unyielding we would relish to felicitate almighty Allah to propel on our formation. We would relish to felicitate our gratuity portion, Dr. A K H Helaluz Zaman , guide pedagogue, Gratuity of Duty ASA University Bangladesh for giving our this unconcealeding as courteous as for his civic control and stay. Finally we would relish to felicitate our nobility for staying our intrepidity to propel on our formation. It was a usepowerful way for us. Executive Summary Bangladesh is s educeing kingdom. Its per capita allowance is medepend $750 and per capita GDP is $684 and introduce GDP augmentation reprimand is 6%. Most of the race are stay in the lower of indigence verse. Indigence as relish as execblame for our kingdom. To eject indigence council and other mould such as NGOs, Bank has fascinated divers steps. Bangladesh Council has fascinated Millennium Remainder Goals (MDGs) programs that primitive goals is uproot utmost indigence and yearn. They too entertain written Indigence Abatement Manoeuvre Nursing Dissertation (PRSP) to eject indigence. To end the committed MDGs and PRSP, Bangladesh must contest to lay-out duty romance opportunities very speedily. For this council entertain moulded SMEs Foundation. SMEs annals Diminutive and Moderation messageinatements, it can be determined as messageinatements which entertain at most 250 exerciseees and an annual turnover not abundant 50 favorite Euros. Further there is the dignity of Diminutive messageinatement- they fewer than 50 staff portions and messageinate than 10 favorite Euros turnover- and micro- messageinatements (terminate than 10 lifes and 2 favorite Euros turnover). Unanalogous countries and moulds determine SME apart. The council of Bangladesh has categorized SME into two indelicate classes (a) manufacturing messageinatement and (b) non manufacturing activities. Manufacturing messageinatements can be disconnected into two categories (a) Diminutive messageinatement and (b) Moderation messageinatement. Non-manufacturing activities too can be disconnected into two categories (a) Diminutive messageinatement and (b) Moderation messageinatement. According to Bangladesh Bureau of Statistics unanalogous messageinatements are determined as Micro toil that compute of exerciseees is 0-9, diminutive has 10-49 exerciseees, Moderation has 50-99 exerciseees and Catholic aloft 99 exerciseees. To accomplished this assignment we entertain composed postulates from the induced commencement such as internet, books, life etc. The objectives of the con-over are to scan the introduce predicament of SME in Bangladesh, to conrooted the gists of SME in Bangladesh and praise explanations to overforce the gists. Small and Moderation Enterprises (SMEs), by conceding exporboard surpluses of peculiarity conjointly after a occasion subjectal estimate decompositions and romance of duty opportunities, can effect momentous oblation to the conductment of Bangladesh. Although financing of SMEs in off-farm arcadian economic activities are catholicly depending on equity financing from eespecial and nobility savings, vulgarly banks and financial uses are too hereafter self-assertive to get finance to this sector. As the catholic germinative of duty period by SMEs has attracted watchfulness of the prudence effectrs, a concatenate of models for channeling hypothecations to SMEs are life fascinated. The Council has fascinated up programs to get financial abettance to spread SMEs through hawk banks. Alongside the expenditure of hypothecations, gone FY2004-05, Bangladesh Bank has fascinated up a theory of Tk. 100 crore for refinancing the registerd banks and financial uses as revolving bombardment. Recently, the theory has been broadned after a occasion an repaird allocation of Tk. 600 crore. Up to June 2009, Tk. 716. 44 crore and up to December 2009 Tk. 853. 15 has been disbursed unordered 17 registerd banks and 21financial uses for refinancing germinative entrepreneurs. In decomposition to this, IDA has getd US$10 favorite and the Council of Bangladesh has getd Tk. 112. 32 crore through ‘Enterprises Augmentation and Bank Modernization Project (EGBMP)’. After a occasion the ordinary revolving bombardment of Tk. 224. 50 crore up to June 2009 and Tk. 244. 14 crore up to December 2009 refinancing facilities unordered 2541 germinative entrepreneurs entertain been getd to 15 register banks and 14 financial uses. Moreover, in an endeavor to get incentives to the sector, ADB has been providing an decompositional US$30 favorite to Bangladesh Bank and Tk. 34. 94 up to December 2009 refinancing facilities unordered 3264 germinative entrepreneurs entertain been getd to 9 register banks and 7 financial uses. These annals would assist twain in duty period as courteous as in enhancing the purchasing force of the weak. It is place that micro messageinatements run by up to 10 formationers assist the most which is 86% of the sum oblation from SMEs to GDP of Bangladesh. It is too observed that micro messageinatements run by past than 21 formationers assist environing 7% of sum oblation from SME to GDP of Bangladesh. It is heeded from the board that manufacturing sector assists the momentous oblation in GDP i. e. , 38%. It is too observed from the board that husbandry and interchangecogent and hawk sector assist past than 22 percent in the GDP of Bangladesh. We too pomp the augmentation archetype of SME. It is observed that during 2001-2002 to 2004-2005 in entirety financial year the augmentation reprimand of SME is environing 7%. In 2005-2006 the augmentation reprimand was 9. 21%. The momentous augmentation was in 2006-2007 i. e. 10. 28%. Quantum Index of Formation for Moderation to Catholic Flake Manufacturing Industries in 2009-10 is 431. 51. We too place some momentous gists these are Recommencement infrequency, Noble exerciseee turnover, Scantiness of new-fashioned technology, Weak visible infrastructure, Financial occupations, Withdrawal of unvarying determination, Withdrawal of advice, Withdrawal of entrepreneurship skills, Participation of women entrepreneurs, Path to Bargain and after a occasiondrawal of awareness touching the avail of bargaining cat's-paw, Bureaucracy, Scantiness of pellucid legitimate project, Withdrawal of commitment to reversal and customer pleasure, Withdrawal of temper selfreliance, Withdrawal of exploration and remainder facilities, Ferocious emulation after a occasion the cheaper exotic movables. We too get some praiseation that announcement in the Recommendation passage. At decisive we quittance our assignment on the quittance passage. Diminutive and moderation messageinatements (SMEs) act as a requisite player for the economic augmentation, indigence past (or and swift industrialization of the educeing countries relish Bangladesh. SMEs are momentous in lowerlying kingdom’s economic augmentation, duty period and wild industrialization. Council of Bangladesh has noblelighted the avail of SME in the Industrial Policy-2005. SME has verified by the Ministry of Industries as a ‘thrust sector’. As the SME sector is try intensive, it can cause past duty opportunities. For this infer council of Bangladesh has periodical SME as a indigence past (or cat's-paw. SME too raise the remainder of entrepreneurial skills and reversal. Along after a occasion indigence past (or SME can weaken the modish absenteeism and extensiond money walk in arcadian areas. As a effect it procure repair the plummet of stay in arcadian areas. Deed of SMEs in Bangladesh is momentously place lower the raze of intergregarious plummet. Although council of Bangladesh has fascinated some model to secure the augmentation of SME but those steps are not sufficient at all. Keywords: SME, Finance, Employee, Principal Board of Contents Contents Pages Title Fly……………………………………………………………………………………. 1 Title Page………………………………………………………………………………... …2 Letter of Transmittal…………………………………………………………………. ……. 3 Acknowledgement…………………………………………………………………………4 Executive Summary……………………………………………………………………… (5-7) Board of Contents……………………………………………………………………………8 Passage Name Chapter 1 Introduction…………………………………………………………………………… (9-15) Passage 2 Methodology………………………………………………………………………………16 Passage 3 Decomposition and Interpret Data……………………………………………………. ……… (17-27) Passage 4 Findings and Results………………………………………………………. ……......... (28-30) Passage 5 Recommendations…………………………………………………………………... … (31-32) Passage 6 Conclusion………………………………………………………………………………. ….. 33 References……………………………………………………………………………………34 Passage 1 Introduction Bangladesh is a educeing kingdom. Its per capita allowance is very low and its $750 and per capita GDP is $684. Its introduce GDP is 6%. Bangladesh economic resurvey, 2009-10) Most of the race are stay in the lower of indigence verse. Indigence is the ocean gist of our kingdom. To eject indigence council has fascinated divers steps such as Millennium Educe Goals, fitness Indigence Abatement Manoeuvre Nursing Dissertation (PRSP) etc. To end the committed Millennium Remainder Goals (MDGs) of 2015 or the targets of the Exoteric Manoeuvre for Economic Growth, Indigence Abatement and Social Development, commmedepend generally-known as the Indigence Abatement Manoeuvre Nursing Dissertation (PRSP), the remainder regularity of Bangladesh must contest to spread duty romance opportunities very speedily. The MDGs heed the actions and targets contained in the Millennium Declaration that was grafted by 189 nations during the UN Millennium Summit in September 2000. Bangladesh has made singular way in the accomplishments of MDGs during 1990-2000. Bangladesh advanceion towards MDGs is manifest in cosmical remainder, for model accomplishments of gender echaracter in momentous and induced ground enrolment. Mid-way through to the 2015 target of MDGs accomplishments, Bangladesh has expert momentous grounds and can safely be said to be on trail in connection to most of the targets. A midpromise rescan of way at the gist raze pomps that Bangladesh is making wayive strides in reducing indigence, already bringing down the indigence gap fitness to 9 across 2015 target of 8 after a occasion the reprimand of indigence abatement life 1. 34 percent in connection to the required reprimand of 1. 23 percent. The ocean goals are as subjoined: Goal 1: Uproot Utmost Indigence and Yearn Goal 2: End Universal Momentous Education Goal 3: Elevate gender equity and Emforce women Goal 4: Weaken Child Dullness Goal 5: Rectify Maternal Health Goal 6: Combat HIV/AIDS, emanation and other diseases Goal 7: Secure environmental sustawant Goal 8: Educe a global distributenership for remainder The room of decompositional parching of try in husbandry life slightly scant, the best germinative for this lies in the manufacturing sector. To cause job immeasurableness council placeed SME Establishment that get hypothecation and acceleration to appointly diminutive and moderation messageinatement. In the composition of Bangladesh, the remainder of Diminutive and Moderation Enterprises (SMEs) can be cogitateed as a requisite annals for indigence past (or and secure the swift industrialization. In this Nursing Dissertation we entertain trained to conrooted the gists of SMEs of Bangladesh. The deed of SMEs of Bangladesh distinctly in promises of exerciseee turnover reprimand, temper selfreliance, allocation of bombardments, bargaining activities entertain been place momentously lower the intergregarious plummet. The sector gets negligible stay from council. The reprimand of remainder of SME is not up to the confluence. In appoint to overforce the gists a few suggestions for the remainder of SMEs are absorbed by us. 1. 1 Room and Delimitation of the Con-over This subject SMEs is a very momentous in the composition of Bangladesh. It acceleration us the infer usepowerful way and we are to recognize that the role of SMEs, Problems, prospective and their explanation. But we entertain some limitation; it is we are composed postulates from induced commencement, basically internet using. We do not guide countenance to countenance colloquy accordingly, span was not sufficient for us to delineation this assignment. If we got sufficient span we opine it procure be acceleration to delineation our assignment. 1. 2 Objectives of the Con-over In this Nursing Dissertation we entertain trained to conrooted the occurrenceors that bias the remainder and augmentation of the SME sector of Bangladesh. Thus the unfair bjectives of the con-over are as supervenes: * To scan the introduce predicament of SME in Bangladesh. * To conrooted the gists of SME in Bangladesh. * To praise explanations to overforce the gists. 1. 3 SME Determination SME: encircling the cosmos-herd According to the European Union (2003) SMEs are determined as messageinatements which entertain at most 250 exerciseees and an annual turnover not abundant 50 favorite Euros. Further there is the dignity of diminutive messageinatements — they entertain fewer than 50 staff portions and messageinate than 10 favorite Euros turnover — and micro-enterprises (terminate than 10 lifes and 2 favorite Euros turnover). According to the Cosmos-herd Bank (2006) moderation messageinatements are determined as messageinatements which entertain at most 300 exerciseees and an annual turnover not abundant 15 favorite US dollars. Further there is the dignity of diminutive messageinatements — they entertain fewer than 50 staff portions and up to 3 favorite US dollars turnover — and micro-enterprises entertain up to 10 lifes and $100,000 turnover. In the UK, sections 382 and 465 of the Companies Act 2006 determine a SME for the aim of representationing requirements. According to this a diminutive assembly is one that has a turnover of not past than ? . 6 favorite, a pit fencing sum of not past than ? 2. 8 favorite and not past than 50 exerciseees. A moderation-sized assembly has a turnover of not past than ? 22. 8 favorite, a pit fencing sum of not past than ? 11. 4 favorite and not past than 250 exerciseees. It is compute noting that unimould after a occasionin the UK this determination is not universally applied. In the USA, the determination of diminutive duty is set by a council diexpectation named the Diminutive Duty Administration (SBA) Dimension Standards Office. The SBA uses the promise “dimension plummets” to manifest the catholicst a cause can be in appoint to tranquil be cogitateed a diminutive duty, and accordingly cogent to use from diminutive duty targeted bombardmenting. The cause cannot be dominant in its arena, on a exoteric representation. It must too be inconsequently owned and operated. Unrelish the UK and the European Union which entertain humble determinations applied to all industries, the US has selected to set dimension plummets for each sepaadmonish NAICS coded toil. This change is contrived to heed toil differences in a rectify way. The ost dishonorpowerful dimension plummets are 500 exerciseees for most manufacturing and mining industries 100 exerciseees for interchangecogent exercisement industries $6 favorite of annual returns for most hawk and profit industries $28. 5 favorite of annual returns for most unconcealed & oppressive lowerstanding industries $12 favorite of returns for all eespecial exercisement contractors $0. 75 favorite of returns for most unroving industries. Breaking down the SME determination, Toil Canada determines a diminutive duty as one that has fewer than 100 exerciseees (if the duty is a movables-conceding duty) or fewer than 50 exerciseees (if the duty is a profit-established duty). A rooted that has past exerciseees than these cut-offs but fewer than 500 exerciseees is classified as a moderation-sized duty. (www. environing. com) In India the Diminutive Flake Industries (SSIs) are industrial Nursing essay in which the bombardment in civic proceeds in place and machinery, whether held on holding promises or on lease or by exercise forfeiture does not excel Rs. 10 favorite. The Diminutive Flake Profit And Duty (Industry cognate) Enterprises (SSSBEs) are toil cognate profit and duty messageinatements after a occasion bombardment in civic proceeds, beside fix and edifice up to Ps. favorite. (Ministry of exercisement and Industry, Council of India) According to the SME bank of Pakistan, SME annals an substance, ideally not a generally-known scant assembly, which does not exercise past than 205 lifes (if it is manufacturing cause) and 50 lifes (if it is trading/profit cause) and too fulfils the subjoined criteria of either ‘a’ and ‘c’ and ‘c’ or ‘b’ and ‘c’ as relevant; (a) A trading/profit cause after a occasion sum proceeds at consume beside fix and edifices up to Rs 50 favorite. b) A manufacturing cause after a occasion sum proceeds at beside fix and edifices up to Rs 100 favorite. (c) Any cause (trading, profit or manufacturing) after a occasion net sales not abundant Rs 300 favorite as per extreme financial averments. 1. 4 SME in Bangladesh Unanalogous countries and moulds determine SME apart. The Council of Bangladesh has categorized SME into two indelicate classes 1. Manufacturing messageinatement 2. Non Manufacturing activities Manufacturing messageinatement: Manufacturing messageinatements can be disconnected into two categories; 1. Diminutive messageinatement: Diminutive messageinatement is an messageinatement would be treated as diminutive if, in vulgar bargain prices, the regaining consume of place, machinery and other distributes/components, fixtures, stay profit, and associated technical profits by way of principalized consumes (of turn-key consultancy profits, for model), etc, beside fix and edifice, were to up to Tk. 15 favorite. 2. Medium messageinatement: Moderation messageinatement an messageinatement would be treated as moderation if, in vulgar bargain prices, the regaining consume of place, machinery and other distributes/components, fixtures, stay profit, and associated technical profits by way of principalized consumes (of turn-key consultancy profits, for model), etc, beside fix and edifice, were to up to Tk. 100 favorite. Non-manufacturing activities (such as trading or other profits): Non-manufacturing activities can be disconnected into two categories; 1. Small messageinatement: Diminutive messageinatement is an messageinatement should be treated as diminutive if it has messageinate than 25 formationers, in full-span equipollents. 2. Moderation messageinatement: Moderation messageinatement an messageinatement should be treated as diminutive if it has between 25 and 100 exerciseees. According to Bangladesh Bureau of Statistics unanalogous messageinatements are determined as: Name of Industry| No. of exerciseees| Micro| 0-9| Small| 10-49| Medium| 50-99| Large| Aloft 99| The Ministry of Industries, Council of Bangladesh has been verified subjoined 11 booster sectors: 1. Electronics and electrical 2. Software-remainder 3. Light engineering and metal-established 4. Agro-processing/agro-business/plantation husbandry/ especiacatalogue farming/tissue-culture 5. Leather-making and leather movables 6. Knitchannel and ready-made clothing 7. Plastics and other synthetics 8. Healthcare & diagnostics 9. Educational profits 10. Pharmaceuticals/cosmetics/toiletries 11. Fashion-rich eespecial peculiarity, channel and waste movables. 1. 5 Attainment Review With deference to the SME sector of Bangladesh, exotic and exoteric experts lowertook some studies. Some of the noboard ones are; Uddin (2008), Chowdhury (2007), Miah (2007), Ahmed (2006), MIDAS (2004), ICG (2003), Hallberg (2002). Uddin (2008) has certain that the economic teachableness and overall deed of the SMEs distinctly in the educeing countries are cogitateably depending upon macroeconomic prudence environment and unfair preferment policies pursued for their use. Chowdhury (2007) noblelighted that in composition of Bangladesh SME is characterized by Low principalization and scant proceeds, geographical difference and noble dullness, weak reputation acquirements, very scant path to shapely commencement of reputation, money energy in transactions, very scant annals guardianship way, weak financial exposure on representation of tax offsprings, noble destroy sight has led to noble borrascribpowerful consumes. In a con-over environing SME sector of Bangladesh Miah (2007) certain that the momentous occupations for SMEs are after a occasiondrawal of unbald bombardment, after a occasiondrawal of new-fashioned technology, noble reprimand of cause on bank hypothecations, irregular/inunbald afford of force, weak visible infraconstruction and noble gait consume, weak advice environing bargain opportunities and requirements, inunbald availforce of raw materials, after a occasiondrawal of usepowerful technicians and formationers, after a occasiondrawal of exploration & remainder facilities, ferocious emulation, scantiness of potent and pellucid legitimate project, hardies in pathing technology, reputation occupations, low path to duty profits, occupation of temper of cosmical annals, low awareness, low lobbying largeness, swift changes in prudence environment. Ahmed (2006) observed that availforce of finance is a momentous occupation to shape and augmentation of SMEs in Bangladesh. Banks are disinclined to spread their SME reputation portfolio accordingly they do not cogitate SME lending an beautiful and profiboard Nursing essay. This is so accordingly SMEs are cherished as noble destroy borrowers accordingly of their low principalization, scant proceeds and their want to bear after a occasion indirect requirements of the banks. Administrative consumes are too nobleer accordingly messageinate monitoring and superexpectation the SME formation befits requisite. A con-over (2004) by Micro Industries Remainder Abettance and Services (MIDAS) biblical that commencements of finance are for-the-most-part friends and nobility portion in occurrence of SME. MIDAS trained to conrooted the commencements of bombardments of SMEs. These are: Table-1: Scan Effect of MIDAS Commencement of Funds| Percentage of Finance| Inshapely sector| 41%| Family portions| 20% (cause gratuitous)| 4% (after a occasion cause)| | NGO| 17%| Bank| 18%| According to Hallberg (2002), a sboard macro-economy, an unconcealed exercisement and bombardment regime, and a competitive financial sector are argued to be most qualitative ingredients for a vibrant peculiar sector. But after a occasion a law and appoint predicament lower the optimum raze, putrescence courteous aloft the raze of confutation and unsboard gregarious predicament, the domiciliary environment of Bangladesh does not supervene to any acceleration, rather overheads the well-behaved-behaved-substance of SME in this kingdom. Passage 2 Methodology This is basically a library exploration. Most of the postulates entertain been composed from induced commencements. So the exploration formation has been demonstrateed on published advice and postulates availcogent in any mould such as books, lifes, magazines, newspapers etc. abandoned to SME sector. Induced advice has been composed from Ministry of Industries, SME placeation, Bangladesh Bureau of Statistics, MIDAS, and Financial Institutions and from other SME cognate moulds. Relevant tenets and attainment in this composition has too consulted. In this proviso we entertain stird the postulates of decisive six years of SMEs of Bangladesh. We entertain trained to stir the deeds of SMEs by applying humble statistical decomposition i. e. , augmentation percentage, mediocre etc. Passage 3 Decomposition and Interpret Postulates 3. Diminutive and Moderation Enterprises (SMEs) Diminutive and Moderation Enterprises (SMEs), by conceding exporboard surpluses of peculiarity conjointly after a occasion subjectal estimate decompositions and romance of duty opportunities, can effect momentous oblation to the conductment of Bangladesh. Although financing of SMEs in off-farm arcadian economic activities are catholicly depending on equity financing from eespecial and nobility savings, vulgarly banks and financial uses are too hereafter self-assertive to get finance to this sector. As the catholic germinative of duty period by SMEs has attracted watchfulness of the prudence effectrs, a concatenate of models for channeling hypothecations to SMEs are life fascinated. The Council has fascinated up programs to get financial abettance to spread SMEs through hawk banks. Alongside the expenditure of hypothecations, gone FY2004-05, Bangladesh Bank has fascinated up a theory of Tk. 100 crore for refinancing the registerd banks and financial uses as revolving bombardment. Recently, the theory has been broadned after a occasion an repaird allocation of Tk. 600 crore. Up to June 2009, Tk. 716. 44 crore and up to December 2009 Tk. 853. 15 has been disbursed unordered 17 registerd banks and 21financial uses for refinancing germinative entrepreneurs. In decomposition to this, IDA has getd US$10 favorite and the Council of Bangladesh has getd Tk. 112. 32 crore through ‘Enterprises Augmentation and Bank Modernization Project (EGBMP)’. With the ordinary revolving bombardment of Tk. 224. 50 crore up to June 2009 and Tk. 244. 14 crore up to December 2009 refinancing facilities unordered 2541 germinative entrepreneurs entertain been getd to 15 register banks and 14 financial uses. Moreover, in an endeavor to get incentives to the sector, ADB has been providing an decompositional US$30 favorite to Bangladesh Bank and Tk. 334. 94 up to December 2009 refinancing facilities unordered 3264 germinative entrepreneurs entertain been getd to 9 register banks and 7 financial uses. These annals would assist twain in duty period as courteous as in enhancing the purchasing force of the weak. Detailed refinancing of Bangladesh Bank to several financial uses and banks is pompn at Table. Table-2: Summary Advice on SME refinancing (up to June 2009)* Refinancing Source| Amount refinanced (in crore Taka)| No. of Beneficiary Enterprises| | Established Capital| Mid Promise Loan| Long Promise Loan| Sum hypothecation| Industrial Loan| Hawk 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 Economic Rescan 2008-0, Passage 8, Industry) Table-3: Summary Advice on SME Refinancing from Bangladesh Bank (up to June 2009)* (*Source: Bangladesh Economic Rescan 2009-2010) Table-4: Summary advice on SME Refinancing from IDA (up to June 2009)* (*Source: Bangladesh Bank & Bangladesh Economic Rescan 2009-2010) Table-5: Summary Advice on SME Refinancing from ADB (up to June 2009)* *(Source: Bangladesh Bank & Bangladesh Economic Rescan 2010) Board 8. 3 pomps that up to June 2009, Bangladesh Bank and IDA entertain prescribely Tk. 940. 94 crore as refinancing to 17 banks and 22 non-bank financial uses. It may be announcemented that the bombardment has been disbursed (by the announcemented banks and financial uses) to a sum of 9478 SMEs prior as hypothecation. Out of the sum hypothecation, Tk. 239. 9 crore has been getd as formationing principal, Tk. 432. 79 crore as moderation-promise hypothecation and Tk. 268. 15 crore as long-promise hypothecation. Table-6: Summary Advice on SME refinancing (up to 31, March 2010)* | RefinancingSource| Amount of Refinancing (In Tk. Crore)| Compute of financing messageinatement (Sector trained)| | | Established principal| Mid promise hypothecation| Long promise hypothecation| Sum hypothecation| Industrial hypothecation| Hawk hypothecation| Service| Total| 1. | Bangladesh Bank 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 Bank & Bangladesh Economic Rescan 2009-10, Passage 8, Industry) Table-7: Summary advice on SME Refinancing from Bangladesh Bank (up to June 2010)* | Name of Banks/FIs Refinanced| Amount of Refinancing (In Tk. Crore)| No. of Beneficiary messageinatements (Sector trained)| | | Established principal| Mid promise hypothecation| Long promise hypothecation| Sum hypothecation| Industrial hypothecation| Hawk hypothecation| Service| Total| 1. | Peculiar banks(17)| 201. 43| 226. 43| 65. 98| 493. 84| 1257| 4469| 562| 6288| 2| Financing 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 Bank & Bangladesh Economic Rescan 2009-10, Passage 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 messageinatements (Sector trained)| | | Established principal| Mid promise hypothecation| Long promise hypothecation| Sum hypothecation| Industrial hypothecation| Hawk hypothecation| Service| Total| 1. | Peculiar banks(15)| 57. 48| 67. 07| 24. 73| 149. 27| 688| 1167| 79| 1934| 2| Financing 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 Bank & Bangladesh Economic Rescan 2009-10, Passage 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 messageinatements (Sector trained)| | | Established principal| Mid promise hypothecation| Long promise hypothecation| Sum hypothecation| Industrial hypothecation| Hawk hypothecation| Service| Total| 1. | Peculiar banks(9)| 144. 32| 90. 95| 34. 17| 269. 44| 657| 1893| 155| 2705| 2| Financing 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 Bank & Bangladesh Economic Rescan 2009-10, Passage 8, Industry) Board 8. 3 pomps that up to March 2010, Bangladesh Bank and IDA entertain prescribely Tk. 1205. 99 crore as refinancing to 17 banks and 22 non-bank financial uses. It may be announcemented that the bombardment has been disbursed (by the announcemented banks and financial uses) to a sum of 12408 SMEs prior as hypothecation. Out of the sum hypothecation, Tk. 272. 70 crore has been getd as formationing principal, Tk. 519. 79 crore as moderation-promise hypothecation and Tk. 304. 80 crore as long-promise hypothecation. 3. 2 Introduce Scenario of SME In 2003 the Intergregarious Consultancy Group (ICG) of the UK, in collaboration after a occasion the Micro Industries Remainder Abettance and Services (MIDAS), guideed the Exoteric Peculiar Sector Scan of Enterprises in Bangladesh. The scan effects prepare the quittance that there were approximately 6 favorite Diminutive and Moderation Enterprises (SMEs), which middle messageinatements after a occasion p to 100 formationers exerciseing a sum of 31 favorite race, equipollent to 40 per cent of the population of the kingdom of age 15 years and aloft. The scan too place that the industrial construction of SMEs consisted of chiefly interchangecogent and hawk exercisement and repairs (40 per cent), formation and sale of unroving movables (22 percent), profits (15 percent), and manufacturing medepend (14 per cent). Thus the scan brought out the occurrence that the catholic untapped germinative for exposition in genesis and formation could be exploited (or contributing past momentously to the exoteric conductment. Another requisite findings of the scan lower discourse was that SMEs assistd BDT 741 ($ 12. 5) billion i. e. forthcoming 25 per cent of the GDP (BDT 2,996 billion) in 2003. It is heeded from this scan that messageinatements exerciseing 2-5 formationers assist 51 percent portion-out of the sum SME oblation to the conductment, superveneed by 26 percent by those having medepend one formationer and 10 per cent by those having 6-10 formationers. For LDCs relish Bangladesh, SMEs are a noblely consume-potent direction for industrial remainder. It is observed from Table-1 that micro messageinatements run by up to 10 formationers assist the most which is 86% of the sum oblation from SMEs to GDP of Bangladesh. It is too observed that micro messageinatements run by past than 21 formationers assist environing 7% of sum oblation from SME to GDP of Bangladesh. Table-10: Sectors trained oblation of SME in GDP of Bangladesh (Taka)* Sectors| Sum oblation to GDP (Taka)| Percent of sum 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%| Interchangecogent and Hawk exercisement and Repairs| 171,335,861,390| 23%| Hotels and cessationaurants| 28,599,263,975| 3%| Transport, Storage and Communication| 8,950,171,356| 1%| Real aver, Renting and Duty activities| 13,771,436,794| 2%| Education| 151,808,506| 1%| Health and Social formation| 2,743,049,893| 1%| Others Profit activities| 15,632,094,785| 2%| Total| 741,327,159,609| 100%| (Source: ICG/MIDAS Survey, 2004) Figure-1: Sector trained oblation of SME in GDP of Bangladesh Board & graph 2; gets the advice touching sector trained oblation of SMEs to GDP. It is heeded from the board that manufacturing sector assists the momentous oblation in GDP i. e. , 38%. It is too observed from the board that husbandry and interchangecogent and hawk sector assist past than 22 percent in the GDP of Bangladesh. Table-11: Augmentation archetype of SME* Year| Augmentation reprimand of Catholic & Moderation messageinatement| Augmentation reprimand of Diminutive messageinatement| 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 Economic Rescan 2009-2010, Passage -8, Industry) Figure-2: Augmentation reprimand of SMEs Board 3 pomps the augmentation archetype of SME. It is observed that during 2001-2002 to 2004-2005 in entirety financial year the augmentation reprimand of SME is environing 7%. In 2005-2006 the augmentation reprimand was 9. 21%. The momentous augmentation was in 2006-2007 i. e. 10. 28%. Table-12: Augmentation archetype of Manufacturing Sector * Year| Augmentation percentage of Manufacturing 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 Economic Rescan 2009-2010, Passage -8, Industry) Figure-3: Augmentation reprimand of Manufacturing Sector Board pomps the augmentation archetype of manufacturing sector. It is observed that the mediocre augmentation during 1972 to 2005 was 6. 4%. During 2001-2002 to 2006-2007 the momentous augmentation was in year 2006-07 i. e. , 11. 19%. It is too observed that during 2002-2003 to 2005-2006 in entirety financial year the augmentation of manufacturing sector was past than 6%. Table-13: Dimension and Augmentation Reprimand of Manufacturing Sector* At civic prices of 1995-96) (Taka in Core) Year| Catholic & Moderation messageinatement| Diminutive messageinatement| Sum 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 Economic Rescan 2009-2010, Passage -8, Industry) Table-14: Quantum Index of Formation for Moderation to Catholic Flake Manufacturing Industries* FY2000-01 to FY2008-09 (1988-89=100) Medium to catholic flake 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 Economic Rescan 2009-2010, Passage -8, Industry) Passage 4 Findings and Results At introduce SME sector is confrontment a lot of gists in Bangladesh. Some momentous gists are as supervenes: 1. Recommencement infrequency: In Bangladesh infrequency of raw materials overhead the force of SME to be ship-produce oriented and limits its force to gain past past stages of intergregarious duty. 2. Noble exerciseee turnover: Due to scant augmentation of SME most of the usepowerful exerciseees concession SMEs. Levy (2003) observed that SMEs are acquirements creators but weak at acquirements remonstrance. 3. Scantiness of new-fashioned technology: One of the ocean barriers for the remainder of SME in Bangladesh is inunbald technologies. Divers SMEs entertain failed to graft new-fashioned technology. 4. Weak visible infrastructure: Inunbald afford of requisite utilities relish electricity, infiltrate, roads and nobleways overhead the augmentation of SME sector. Moreover unfavorcogent geographical stipulations extension the gait consume. 5. Financial occupations: Availforce of finance overheads the augmentation of SMEs in Bangladesh. Bangladeshi bank cogitates SMEs as noble destroy borrowers accordingly of their want to bear after a occasion the bank’s indirect requirements. Only environing 15-20% of the owners of SMEs own any immovcogent peculiarity. Bankers offspring hypothecation on the representation of holding of immovcogent peculiarity as indirect destroy. As a effect it automatically excludes cessation 80% SME’s from the catalogue of absolved clients of the banks. Whatever indirect SME’s can conduct gets used up in talking the promise hypothecation leaving them after a occasion no annals to prosecute formationing principal hypothecations from banks. Accordingly of low path to useal financing SME’s depend on powerless financing profits from inshapely commencements. 6. Withdrawal of unvarying determination: In Bangladesh the determination of SME has alterpowerful overspan in unanalogous industrial prudence announced by the council in unanalogous year. Absence of unvarying determination peculiarity the mouldulation and implementation of SME prudence hard. 7. Withdrawal of advice: Miah (2006) has observed that SMEs entertain very scant use of advice technology (IT). Accounting load is used by 1-2% of the SMEs. The use of computers is biblical by say 15% of the SMEs, occasion the use of the Internet for duty aims applies to say 8-10% of SMEs. 8. Withdrawal of entrepreneurship skills: Conservative composition towards destroy, after a occasiondrawal of expectation, force to effect delineation and implementing those overhead the augmentation of SME in Bangladesh. 9. Participation of women entrepreneurs: Etemper of unconcealeding is a momentous gist for SME. Female entrepreneurs are treated discriminately. They are not courteous represented in duty mould. Council does not get unbald useal abettance for women entrepreneurs. 10. Path to Bargain and after a occasiondrawal of awareness touching the avail of bargaining cat's-paw: For SME, ascribpowerful a hawk immeasurableness is very valupowerful in the momentous cities in Bangladesh. As a effect divers customers are not causeed to buy remainders and profits from SMEs. Accordingly they can’t justice the temper until they visiblely examined the remainder. Most of the occurrences SMEs in Bangladesh are not cogent to use the Integrated Marketing Communication (IMC) cat's-paws. But these cat's-paws play the role of momentous spur to motivate the customers and restrain them. The kingdom does not entertain sufficient bargaining capforce and annals to endow in bargaining. 11. Bureaucracy: Wang (1995) observed that the inunbald council stays are top ranking occupations for SMEs. Unrequisite layers of Bureaucracy and red-taps weaken the competitiveness of SME and preferment the consume of transactions and formations. 12. Scantiness of pellucid legitimate project: The scantiness of an potent and pellucid legitimate project discourages SMEs in exploring into destroyy ventures of duty. There are a compute of unrequisite shapely requirements to rouse and run duty that cause noble obedience consumes and besupervene barriers to SME remainder, augmentation and bargain note. 13. Lack of commitment to reversal and customer pleasure: Ernesto (2005) certain that to celebrate in stride after a occasion intergregarious emulation, rooteds of all dimension are challenged to rectify and innovate their remainders regularityes civicly. But in Bangladesh SMEs are tranquil not touching the avail of satisfying and resluxuriance customers by subsidy newlight and desired uses. 14. Withdrawal of temper selfreliance: Govt. has failed to execute a exoteric temper prudence, get unbald stay projects and demonstrate a exoteric temper certification example. As a effect SME of Bangladesh has failed to secure the temper of their remainders and profits twain in subjectal and intergregarious bargain. 15. Withdrawal of exploration and remainder facilities: It is observed that bombardment in R&D is tranquil negligible in. 16. Fierce emulation after a occasion the cheaper exotic movables: Ferocious emulation after a occasion the cheaper movables of China, Taiwan, Korea, India, and Thaifix too embarrass denunciation to SME in Bangladesh. Passage 5 Recommendations In appoint to overforce the aloft announcemented gists the subjoined suggestions are praiseed; 1. Council must entertain to grasp unbald measures to secure the natural afford of raw materials for SME. 2. Council needs to grasp alienate measures to fix the partiality salary/wages of the exerciseees of SME. That procure acceleration to minimize the exerciseee turnover. 3. Council and financial use may get unbald finance for new-fashionedization and technological advanceion. 4. Development of infraconstruction is qualitative for the optimum augmentation of SME. So council of Bangladesh needs to grasp alienate prudence manoeuvre for the infraconstruction remainder of Bangladesh. 5. Government, financial uses and Non Council Organizations (NGOs) may grasp requisite steps to secure natural financial stay to the prospective SMEs in Bangladesh. 6. Due to the scantiness of unvarying determination the prudence mouldulation and implementations are not potential. Council should grasp model to educe a unvarying determination of each kind of SMEs. 7. Govt. of Bangladesh should grasp the model to educe web pages exclusively for SME and an integrated SME postulatesbase. It procure weaken the barriers to SME path to global bargain. 8. In appoint to secure the remonstrance of usepowerful formationforce the council should effect the entrepreneurial walk beautiful by minimizing the precariousness. 9. In appoint to enintrepidity women entrepreneurship govt. may; implicate women entrepreneurs in prudence mouldulation and implementation. Arconcatenate bombardments for women entrepreneurs. Get requisite luxuriance to women entrepreneurs in arcadian and modish area of Bangladesh. 10. SME placeation may grasp alienate bargaining cat's-paws to popularize their remainders. 11. For minimizing red tapes and accelerating the augmentation of SME council may get one roof profit lower the SME placeation. 12. Appropriate legitimate executeformation is requisite to secure the remainder of SME of Bangladesh. 13. In this era of fervent emulation natural delineationning and temper rectifyment act as a prerequisite for the operation of SMEs. In appoint to rectify the temper SMEs can supervene the Just in Span (JIT) philosophy and use Sum Temper Management (TQM) and can secure the rectifyment of temper and remainderivity at a span. 14. Council should demonstrate a affectly certification example distinctly for SMEs. So that this sector can allure a technical evaluation of the temper of their remainders after a occasionin a shortest potential span. The certification of the example should be cosmos-herd broad current. Govt. ay too get abettance to SMEs during the certification regularity and elevate the avail of remainder certification for intergregarious confutation unordered the SMEs. 15. Exploration and Remainder (R&D) is must for the remainder and augmentation of SME. So council must entertain to endow in R&D for ensuring the intensification of SME of Bangladesh. 16. Restriction may be imposed on tenor of SMEs’ remainders which are availcogent in Bangladesh. Passage 6 Quittance Diminutive and moderation messageinatements (SMEs) act as a requisite player for the economic augmentation, indigence past (or and swift industrialization of the educeing countries relish Bangladesh. SMEs are momentous in lowerlying kingdom’s economic augmentation, duty period and wild industrialization. Government of Bangladesh has noblelighted the avail of SME in the Industrial Policy-2010. SME has verified by the Ministry of Industries as a ‘thrust sector’. As the SME sector is try intensive, it can cause past duty opportunities. For this infer council of Bangladesh has periodical SME as a indigence past (or cat's-paw. SME too raise the remainder of entrepreneurial skills and reversal. Along after a occasion indigence past (or SME can weaken the modish absenteeism and extensiond money walk in arcadian areas. As a effect it procure repair the plummet of stay in arcadian areas. Deed of SMEs in Bangladesh is momentously place lower the raze of intergregarious plummet. Although council of Bangladesh has fascinated some model to secure the augmentation of SME but those steps are not sufficient at all. But council pomps its dogmatic composition towards this sector. Bangladesh council should remain to confer past focuses on some areas, such as provision of finance, get infraconstruction facilities, execute alienate legitimate executework, demonstrate exoteric temper prudence etc. From the series of our decomposition it seems that for the economic remainder of Bangladesh SME can play a requisite role. We are truly optimistic that if the aloft announcemented suggestions are implemented then the augmentation of SME sector in Bangladesh procure be wild. 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 Achievement Institute, Dhaka. 2. Alam, M. S. and Ullah, M. A. (2006). SMEs in Bangladesh and Their Financing: An Decomposition and Some Reccomendations. The Consume and Management, Vol. 34, No. 3. 3. Hossain, N. (1998). Constraints to SME Remainder in Bangladesh, Seminar Proceedings, University of Maryfix at College Park, USA. 4. Miah, M. A. (2006). Key Success Factors for Exoteric SME Remainder Program; Lessons for OIC Portion Countries from Bangladesh Experience, SME Foundation, Dhaka, Bangladesh. 5. Mintoo, A. A. (2006). SMEs in Bangladesh. CACCI Journal, Vol. 1. 6. Declaration of Asian Remainder Bank (ADB). (2002). Strategic Issues and Germinative Response – Diminutive and Moderation Achievement Remainder and Ship-produce Expansion. Asian Remainder Bank (ADB), Dhaka. 7. SME Cell. (2005). Prudence Strategies for Remainder of SME, Ministry of Industries, Council of People’s Regenerally-known of Bangladesh. 8. SME Prudence Strategies. (2005). Publication of Council of People’s Regenerally-known of Bangladesh. 9. Uddin, S. M. N (2008). SME Remainder and Regional Economics Integration, Seminar Proceedings, Joint Regional Workshop held in Tokyo, Japan. 10. Ahmed, Kashfia & Chowdhury, Tanvir Ahmed (2009). Deed Evaluation of SMEs of Bangladesh, Intergregarious Life of Duty and Management, Vol. 4 No. 7.