Do you think that all banks should give top priority in financing SME sector for creating employment, reduction of poverty and overall development of the country

 Small & Medium Enterprise (SME) plays a pivotal role in the economic growth and development of Bangladesh. Actually, SME works as the platform for job creation, income generation, and development of forward and backward industrial linkages and fulfillment of local social needs. SMEs occupy a unique position in the economy of Bangladesh. Mainly private sector development depends on them.

 In view of present economic development effort in Bangladesh the SME sector plays an important role.  These are reflected in the following performance

activities of this sector:

   SME contributions to value addition in manufacturing is in the range of 20 to 25 percent of GDP

     There are approximately six million SMEs, which include enterprises with up to 100 workers employing a total of 31 million people – equivalent to 40 per cent of the population of our country aged 15 years and above. Some private survey also found that the industrial structure of SMEs consisted of primarily wholesale,  retail  trade  and  repairs  (40  per  cent),  agricultural goods (22 per cent), services (15 per cent) and manufacturing (14 per cent).

     During the Fourth Five year plan, a total of 0.35 million jobs were created against the target of 0.4 million.

   SME sector help alleviate poverty, increase income level of rural people and promote agro-industrial linkage in Bangladesh.

     SME sector requires lower energy supply, lower infrastructure facilities and this sector imposes less environmental risk.

   They contribute towards better utilization of local resources and skills that might otherwise remain unutilized.

     Small  industries  being  labor  oriented  are  capable  of  generating  more employment.

     They are necessary to maintain and retain traditional skills and handicrafts.

   They are the only medium for diversification of rural economy and for peaceful  and  concurrent  socio-economic  development  of  all  classes  of people

 

To put it simply, SMEs are the heart of the industrial sector of the country, employs the bulk  of the working population and are owned  by Bangladeshi entrepreneurs.  They  provide  a  huge  range  of  goods  and  services  to  the Bangladeshi population, especially in the rural areas, alongside providing vital support in the production chain to large industries. From the above discussion, we can say that SMEs are playing an important role in our economy in various ways.

From the above discussion it is easier to say that as sme plays an important role for creating employment, reduction of poverty and overall development of the country all banks should give top priority in financing SME sector