Experts suggest data-based policies to address Covid challenges for CMSMEs

Ensuring transparent responses, based on data-based policies, is essential to address Covid-induced challenges for the cottage, micro, small and medium enterprises (CMSMEs), especially women entrepreneurs, who face multiple barriers in accessing finance from the government's stimulus packages, economists and entrepreneurs said at a programme on Sunday.

The Centre for Policy Dialogue (CPD), a Dhaka-based think tank, and The Asia Foundation Bangladesh jointly organised the policy workshop on "Covid-induced Stimulus Packages for SMEs & Women-led Enterprises Exploring Research-Policy Interlinkages" at The Westin Dhaka.

CPD Executive Director Dr Fahmida Khatun moderated the event and its Research Director Dr Khondaker Golam Moazzem presented the keynote paper titled, "Did Research Get Attention in Covid-induced Public Policy Responses? Analysis on Research-Policy Interlinkages on CMSMEs and Women-led Enterprises".

CPD analysed 52 studies, which are related to the Covid-19 pandemic and its association with SMEs and women entrepreneur-related concerns.

Shedding light on the research-policy linkage aspect, the study revealed that the relevant policy-making was influenced by the urgent need for the assistance of businesses raised by business associations and by the pressure from large borrowers, said Dr Moazzem.

He said due to lack of sufficient guidance from the policymakers in case of selecting borrowers, the packages have been made broad-based covering all the small and medium enterprises (SMEs).

"Thus, a number of challenges emerged in the selection process such as lack in the specification of area, gender, and racial issues," Dr Moazzem observed, adding that their study aimed to examine the relationship between public policies and research during the period of the pandemic.

He said during the pandemic period, a total of 27 stimulus packages have been announced with a combined fiscal and financial support of Tk1.29 lakh crore.  

"Overall stimulus packages include a diverse range of intervention," he added. "But the support for SMEs and women entrepreneurs are rather insignificant. Particularly, coverage for women entrepreneurs is limited."  

The CPD research director said the Bangladesh Bank has created several refinancing schemes totalling Tk41,500 crore.

Out of these, Tk20,000 crore has been announced for SMEs as refinance facilities. Additionally, a Tk1,500 crore package has been announced for the microcredit and marginal people's lifestyle development programme, he said.

Golam Moazzem said, during this time, the government took a total of 564 policy decisions. Among them, 49 were related to women entrepreneurs and small or medium entrepreneurs.

"The decisions that the government took regarding policies have good terms and conditions," he added. "But the implementation authorities have added unnecessary conditions over it. And that's why the women and small or medium entrepreneurs couldn't take advantage of it."

Fatema Khatun, of SME Utpadon Seba O Biponon (Khulna), tried for three months to get a loan from the stimulus package in 2020. The entrepreneur lost her hope after moving from bank to bank and in the end, she referred to the government stimulus for SME as a farce.

"Thus, they are putting me and thousands of other women entrepreneurs like me in misery. They don't directly tell us that they won't give us the loan," she added. "But by misleading us and giving us false hope, they made us the victims of harassment and frustration. It's truly disappointing."  

Liza Fahmida, a deputy general manager at the Bangladesh Bank, said the central bank is aligned with the government's strong determination to provide robust support in tackling the impacts of the pandemic.

The issue involving the lack of relevant databases was echoed in the discussion delivered by Professor Dr M Abu Eusuf of the development studies at the University of Dhaka.

"Updates on the disbursement of the stimulus packages should be made public on a regular basis," he said.

He felt that the bank-client relationship should be more women-friendly and unbiased. He also shed light on issues such as collateral guarantor and one-stop service.

Professor Dr Sayema Haque Bidisha, of economics at the University of Dhaka, also shed light on issues like lack of information, lack of market availability, lack of connectivity with the support chain, among others.

Swedish Ambassador to Bangladesh Alexandra Berg Von Linde said the overarching objectives of the project include the increase of female participation in the labour force and overcoming policy-related challenges in light of Covid's impacts on the marginalised group.

Bangladesh Kazi Faisal Bin Seraj, country representative of The Asia Foundation, delivered the introductory speech at the event where Local Government, Rural Development and Cooperatives Minister Md Tazul Islam attended as the chief guest.

Lawmaker Kazi Nabil Ahmed, a member of the parliamentary standing committee on foreign affairs, also attended the programme as a special guest.