Coronavirus fallout: SMEs seek fiscal, financial support

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'Typically, SMEs run on a small sum of money, but because of dwindling sales, their funds dry up'

As the coronavirus pandemic hit the economy, the country’s Small and Medium Enterprises (SMEs) sought fiscal and financial support from the government, on Monday.

Speaking with Dhaka Tribune, entrepreneurs urged the federal government to take effective measures such as for example providing working capital, tax waivers, incentives, low priced long-term loan facilities for small and medium-sized businesses to keep their production running in the crisis.

“Thousands of small businesses are fighting the falling domestic demand because of the outbreak of COVID-19 weighing badly on small investors,” National Association of Small and Cottage Industries of Bangladesh (NASCIB) President, Mirza Nurul Ghani Shovon, told Dhaka Tribune.

These small businesses are actually struggling to keep their businesses running as their sales are down drastically due to the countrywide lockdown, said Ghani.

Typically, SMEs run on a small amount of cash, but due to dwindling sales, their funds dry out, he explained. 

In the given context, the federal government should devise a bailout package including interest-free loans, tax waivers and the withdrawal of VAT for the SME sector, added  the business leader.

Aside from the financial support, the sector urged the government to defer utility payments, including gas and electricity, for at least six months. 

“If it's done, it can help reduce a funding crunch somewhat.”

NASCIB President Mirza Nurul Ghani Shovon urged the federal government to take into account incentives for personnel as a wide array of employees risk losing jobs because of slower demand.

According to NASCIB data, there are 6,000 SMEs beneath the Bangladesh Small and Cottage Industries Corporation (BSCIC) clusters, and another one lakh SMEs operate in the united states.  

In the event of shutting down the factories, there will be colossal losses of Tk20,000 crore per month, he estimated.

Top officials at the SME Foundation and Ministry of Industries  are likely to meet Prime Minister Sheikh Hasina today (Tuesday) to go over the existing state of the SME sector following the outbreak of the coronavirus.

“Following the outbreak of the coronavirus, the SME sector is going through a tough time as their sales fell alarmingly, while they are suffering from a shortage of imported raw material supplies ,” said Md. Safiqul Islam, Managing Director   of SME Foundation.

Shafiqul said the sector faced a distressing situation at the same time when small entrepreneurs were bracing for bumper sales prior to the Bangla New year and Eid-ul-Fitr.

“In both of these festivals, they have a high sales volume and live all of those other year on the profits they make on these two major occasions,” he added.
Source: https://www.dhakatribune.com

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