Our SMEs, our hope

Bangladesh is regarded as the emerging economy; the economy which will be the 28th largest in 2030 from 41st position in 2020, as per UK's Centre for Economics and Business Research (CEBR). Though we often ignore the role of small and medium enterprises (SMEs) has been significant to this rising economy. The 6 million SMEs of Bangladesh contribute 25% to the GDP. SMEs have created multi-level socio-economic impact be it in the form of employment creation (two-thirds of private-sector employment are created by SMEs) or production output (contributes 40% of the total production output) or acting as a trusted ecosystem to support during a crisis. For an economy like Bangladesh, SMEs can play a vital role to ensure the current growth and attain future goals despite all kinds of impediments.

The current pandemic situation bears the proof of how capable our SMEs are. Besides economic contributions, SMEs of Bangladesh have courageously come forward to support society to survive the ongoing pandemic. When most people assumed things to go wrong, the public panic was about to spread wild, our SMEs did not give up, rather they fought hard with all their abilities.SMEs have been brilliantly creative in pivoting their business which not only have made possible their own survival but also have supported the survival of the society. We have observed the same rigor and resilience among the SMEs we work with as financing partners.

Our SME team worked every day during the pandemic to serve the changing needs of the SMEs and we are impressed to observe the desperation for survival. The desire of the SMEs to sustain and grow in the midst of adversity is a reflection of how Bangladesh as a country has accelerated over the years. We see true Bangladesh in our SMEs.Despite all these positive aspects, the SMEs of Bangladesh are still far behind compared to other emerging economies in Asia.

The contribution of SMEs to GDP is much higher in other Asian economies compared to that of Bangladesh (25%). Our SMEs are still struggling to overcome the basic issues such as access to low-cost finance, market linkage, skilled labour, export market exposure, etc. In recent times, we have seen BangladeshBank taking initiatives to support low-cost financing through different stimulus and refinancing schemes. Being partners to those initiatives, at IPDCwe have observed SMEs' lack of proper documentation and record-keeping. Since Bangladesh has progressed in many aspects including technology and automation, technological adaptation can solve most problems for our SMEs. The tech ecosystem comprising of tech platforms and payment platforms should reduce the data/record deficiency.IPDC is aware of this situation and in an effort to contribute to solve the problems, IPDC has launched Orjon- South Asia's first blockchain-based digital supply chain finance platform in2019. Suppliers of different reputed companies are enjoying seamless and paperless supply chain finance solutions through Orjon. Through Orjon we are ensuring transparency and security and also solving the data-related problems. To serve the micro and cottage entrepreneurs who are the last mile retailers, IPDChas initiated 'IPDC Dana' to finance the retailers based on their sales data recorded with manufacturers and distributors. This easy and data-driven solution is getting popularity among last-mile entrepreneurs. This small-scale financing is giving us big hope. We can serve a large portion of these groups only through the utilization of technology as IPDC is heading towards that.

Besides the two tech-driven products, IPDCsupports SMEs through two very popular products named 'SME Bondhu'- a convenient product for all SMEs and 'Joyee'- a specialized product for all women entrepreneurs.

We are still living through the ongoing pandemic. Instead of waiting for the pandemic to end, we have to continue our own fight against the pandemic. Our adaptation and innovation are the keys to this war. Our Government and Bangladesh Bank have come forward with guidance and different timely supports.

As a financial institution, we have a direct relationship with SMEs and we have a much bigger role to play. We have to be creative to find an easy, convenient and affordable solution for our SMEs.It is easy to become more risk-averse in our business and yet this is the time when SMEs need the most assistance in order to sustain their business, let alone grow. While Bangladesh Bank did execute their own means of assistance, it still weighed heavily on the conscience of the banks and FIs to pitch in our own methods of assistance regardless of their outlooks. A bit of our courage now will help us stay ahead in the future. It is because our future depends to a great extent on our SMEs.It is fair to say that our CMSMEs that once remained unnoticed and unbanked are now more resilient and agile in keeping up with the country's economic evolution. We acknowledge and appreciate their undeniable spirit and contribution to the economy and believe it's time to help them grow even bigger.

Our loan products:

SME Bondhu: IPDC Finance aspires for small and medium enterprises (SMEs) to sustain and grow and therefore it helps them with competitive interest rates and flexible repayment options via a special loan product 'SME Bondhu'. The aim of IPDC's SMEBondhu is to ensure the continued progress of small and medium entrepreneurs across the country. Joyee: 'Joyee' is a loan product for female entrepreneurs with an attractive interest rate all throughout the year. We wanted to provide a platform for aspiring women entrepreneurs to build their own businesses with passion.IPDC Orjon: IPDC offers the country's first blockchain-based supply chain financing platform, Orjon, to assist businesses in a fast and secured way. Orjon is an eco-system that not only ensures financial inclusion but will also make a transparent and reliable marketplace and create a collaboration of all the value chains.IPDC Dana: IPDC Finance runs a ground-breaking transaction-based digital credit programme aiming at the vast network of retailers across the country under the name 'Dana'. IPDC provides collateral-free loans to the retailers via Dana.

Mominul Islam is the Managing Director and CEO of IPDC Finance Limited