SMEs see no way to overcome these losses

The country's small and medium enterprises (SME) have been passing through a hard time due to the impact of the nationwide unrest and subsequent curfew.

Entrepreneurs say their business has come to a standstill as they cannot sale their products and at the same time, they are unable to manufacture new products due to a lack of supply of raw materials.

Maksuda Khatun, proprietor of Shabab Leather, told The Business Standard, "We produce leather products. We have our factory and showroom at Hazaribagh, which have been closed for the last seven days."

He said they have monthly sale of around Tk3 lakh but they have incurred a massive loss during the last few days.

"Some corporate houses buy products from us. We have received an order from a company to supply 200 leather bags which will be presented to its workers during a training. The training, which was schedule for last Sunday, has been postponed. But we have already made the bags," he added.

"We did not face uncertainties to this extend even during the Covid pandemic because it seemed there were humanity among people. But we have now mentally broken down by seeing this ferocity. It is very difficult to overcome this losses with money."

He said they have around 50 employees and the company itself has to pay the wages. In addition, they have to pay Tk60,000 per month. "How will we pay the wages if we cannot earn," he added.

Save Trading Corporation Sotej in Uttara of the capital produces bread, biscuits and other food products.

Mostafa Kamal, managing director of the company, told TBS, "We cannot deliver our products. Usually, we have a daily sale of Tk115,000. We send products to every supershop. Our products go to various destinations across the country including Dhaka, Barishal, Mymensingh, Shariatpur and Madaripur. But all are closed now." 

He said they have a total of 35 workers and 10-12 of them are accommodated and fed by the company itself.

He said they took Tk2 crore in loan to overcome losses incurred during the Covid pandemic. Tk1 crore of the loan is still unpaid. "We have to struggle to repay the loan every month. The current situation has worsened our struggle," he added.

Mostafa Kamal said the prices of their raw materials, including edible oil, flour and sugar have almost double over the last two years. 

"We have been passing through a very difficult time. We are now struggling to stay afloat," he added.

Md Masudur Rahman, chairperson of SME Foundation, told TBS, "Business activities have come to a standstill over the last few days. The remaining supply chain has also been disrupted. As our entrepreneurs produce a small amount of products, and again buy raw materials after selling those products. So, I think our entrepreneurs have been passing through a very tough time."

"We hope normalcy will return soon," he added.             

Entrepreneurs at Kaluhati footwear cluster in Rajshahi produce leather shoes, belt and moneybags.

Ronju Ali, president of Kaluhati Footwear Industry Owners Cooperative Association, told TBS, "We have 52 entrepreneurs here. Due to the prevailing situation, their production has come to a halt as they cannot bring in raw materials from Dhaka due to transport service disruptions.

He said, "Around 18 of their entrepreneurs have between Tk2 and Tk4 lakh loan. It will be difficult for them to repay the loans if they cannot sale their products." 

In a study, conducted in 2013, 177 clusters were identified across the country, with a workforce of about 20 lakh. The annual turnover of 70,000 businesses in these clusters is about Tk30,000 crore, according to SME Foundation.

Nusrat Jahan Upoma, director at Nari Uddokta Forum, said more than 300 of the forum's 47,000 members are registered entrepreneurs. 

"Basically, we have double-edged crisis. Our micro entrepreneurs' business is entirely internet-based. Their business remain totally stopped due to the internet blackout. While the others cannot open their small stores even," she added.

She said their entrepreneurs have around Tk20,000-Tk30,000 monthly income on average. With this income, they contribute to their families to meet the expenses. "The small entrepreneurs are under threat now."

Currently, the contribution of the SME sector to the country's economy is 32%. According to Bangladesh Bureau of Statistics, there are more than 78 lakh cottage, micro, small and medium entrepreneurs in the country which represent around 99% of the total industrial institutions. 

The SME sector accounts for around 85% of the country's total industrial employments. Around two crore people are directly or indirectly employed in the SME sector.