The interim government has taken a number of measures to transform the small and medium enterprise (SME) sector into the main driving force of the Bangladesh economy, the Chief Adviser’s Office (CAO) said in a statement yesterday.
As part of the measures, the government has scrapped the rule that required entrepreneurs to keep 10 percent of export proceeds in banks on a compulsory basis.
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It has also sent a proposal to Bangladesh Bank (BB), requesting the maintenance of a foreign currency quota of a minimum of $3,000 annually for entrepreneurs to enable them to conduct international business.
The decisions were taken at meetings of the Investment Coordination Committee, chaired by Lutfey Siddiqi, special envoy on international affairs to the CA.
Bangladesh Bank Governor Ahsan H Mansur and National Board of Revenue Chairman Md Abdur Rahman Khan attended the meetings, along with representatives from the government and private sectors.
The CA’s office said decisions were taken to design SME-friendly products, conduct a feasibility study on providing loans of up to Tk 5 lakh without a trade licence, and review the interest rate on loans for small businesses.
The statement said a number of decisions — such as strengthening the NBR’s monitoring to expedite and simplify the sample clearance process — are under implementation.
Besides, steps are being taken to ensure that online sales proceeds are quickly deposited into entrepreneurs’ bank accounts.
Bangladesh Bank (BB) has revised the ceilings for advance payments against imports to facilitate international trade and streamline import procedures.
An importer can now make advance payments of up to $20,000 without requiring repayment guarantees, up from the previous limit of $10,000, BB said in a notice in September.
Similarly, the ceiling for advance payments from Exporters’ Retention Quota (ERQ) accounts has been increased from $25,000 to $50,000.
The NBR has decided to resolve the complexity related to the Harmonised System (HS) Codes — the codes for goods in international trade — to support SMEs.
Lutfey Siddiqi said one of the main objectives of the reforms is to increase dynamism in the economy.
“Collectively, the SME sector is a huge contributor to our economy, although their voices are not heard as loudly as some large businesses,” he said.
“We must help SME entrepreneurs increase their dynamism and simplify their business at every stage, from finance to payments and logistics. The government must be a facilitator, not an obstacle.”
Touted as the backbone of the industrial sector, Bangladesh has around 78 lakh cottage, micro, small, and medium enterprises, which together contribute about one-fourth of the country’s gross domestic product.
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