SME sector: Innovative digital solution is the way forward

The pandemic has affected all spheres of life and business, but the hardest punch hit the already vulnerable small and medium-sized enterprises (SMEs) of Bangladesh. SMEs in the country are not faring well owing to the heavy blow dealt by the pandemic since the growth of this industry is hamstrung by different challenges such as disruptions in logistics, restrictions on mobility, and downward trends of orders. 

According to statistics provided by the Bangladesh Bureau of Statistics, there are about 78 lakh SMEs in Bangladesh, and 25 million workers are directly or indirectly involved with the SME sector. Since the pandemic hit the country last year, small and medium-sized entrepreneurs are struggling heavily to get orders and earn the minimum amount of revenue they need to stay afloat.  

About a year ago, with the onset of the epidemic, digital technology was seen as part of the solution to mitigate the negative impact of COVID-19. Technology has become our lifeline as we have witnessed it revolutionizing all aspects of our lives. Bangladesh should embrace technologies and accelerate digital transformation to realize our ambition of Vision 2041. 

To transition into a high-income country sustaining SMEs is key as they are the engines of growth and drivers of innovation worldwide. They play a significant role in driving economic growth and generating jobs. In Bangladesh, the sector is actually changing the face of the economy. SMEs are playing a vital role for the country's accelerated industrialization and economic growth, employment generation and reducing poverty. SMEs now occupy an important position in the national economy. 

According to a survey conducted by the Bangladesh Institute of Development Studies (BIDS) on the extent of damage caused to small and medium enterprises (SMEs) during the pandemic conducted last year, the sector incurred a loss of around Tk 92,000 crore in just two months.1  According to another report prepared by the Bangladesh Institute of Development Studies (BIDS), there has been an overall decrease in revenue in the SME sector of about 66 percent (FY2019-20).2

Selim R. F. Hussain, Managing Director & CEO of Brac Bank Limited, stated, "Customer behavior and needs have changed dramatically over the last year, both across the world and in Bangladesh. The Bangladesh Banking Sector has stepped up the development of digital services and the migration of all customer segments to such services during the pandemic. As a pioneer and leader of the SME segment, BRAC Bank has aggressively rolled out various digital banking and other services over the last year to help SME customers become more efficient and productive. Our SME customers are rapidly adopting these new ways of banking, and we are expanding our efforts to serve them in many new and different ways."

Imran Ahmed, Deputy Executive Director, Head of Programs, Shakti Foundation, said, "SMEs, despite contributing 25% of our GDP and creating 2 out of 3 jobs in the private sector, have always faced issues like limited access to finance, poor market linkage, and unskilled labor. The pandemic has exacerbated the situation, especially for our women entrepreneurs in the informal sector, with depletion of working capital, restricted mobility, and reduced demand. Quick and easy access to finance is the absolute key for the revitalization of SMEs. We also need to embrace technology as much as possible to facilitate a more business-friendly environment for the SMEs in the new normal world.".

However, industry experts and stakeholders opine that in the changed reality, businesses, small and medium-sized enterprises to be particular, need to leverage the amenities offered by technology and tap into the potentials of different digital solutions offered by digital service providers if they want to experience a quick economic rebound.      

Realizing the necessity of digital transformation and future trends, different telecom service providers in our country are already working on it, and many of them have so far offered myriads of solutions that are contributing in many ways to help the SMEs get back to a buoyant state. 

Grameenphone, a connectivity partner to Digital Bangladesh, has taken many such initiatives with the convergence of ICT and SME to bring about significant changes in their business strategies, continue their operations in an invigorated way, and secure investment.  

Kazi Mahboob Hassan, Chief Business Officer of Grameenphone Ltd., told the Business Standard, "SMEs are the soul of the Bangladesh economy and their contribution to one-fourth of our GDP and bulk of the total employment is remarkable. No doubt, like the whole world we too were initially at a loss in facing the unprecedented crisis. In the wake of the C-19 situation, initially all the sectors specially the SMEs incurred dents in their revenue as they struggled to face the new reality. We are however, reluctant to accept and deviate from our ambition to realise Vision 2041. And rightly so. We have made a mark on the global landscape and were here to play on the big league.  

We have witnessed digital transformation seeping through every aspect of our lives, accelerating the digitalization of economies and societies at an unimaginable pace. The digital transformation has gone hand in hand with the rise of technologies. To survive the sudden economic shift from physical to digital, people are adopting innovative ways of doing business and connecting with everyone. This transition to me is a monumental shift to adapt and sustain in the new normal.   

As an advocate of Digital Bangladesh, Grameenphone has been relentlessly striving to enable SMEs and it is evident that convergence between SME & ICT can take us to new heights. And as a connectivity partner we are creating the bridge, constantly being at the forefront of innovation and implementing our dual expertise of mobility as well as ICT and IoT Service integration to digitize and modernize SMEs and propel them towards growth.  

We want to be a partner who not only caters to their connectivity needs but also their technology needs, who can advise, be support system and not just a mobile network provider.

With secured connectivity, we stood beside the SME segment with tier-one ICT solutions such as bulk messaging, voice broadcasting, automation etc., to keep engaged with their customers. With the advancement of home delivery and easy digital payment, many have migrated their business model online to deliver to their local community more efficiently. Telematic solutions to track fleet and assets along with field force management capabilities have been a opted by the SME community. 

Our continued rapid growth and resilience in the face of the pandemic reassures me that we are on the right track and ready to meet the challenges that will come in realizing our Vision 2041. It is almost certain that the use of technology will be more prominent after this pandemic and dependence on telecommunication and virtual platforms will become the standard. We need to embrace modern technologies that bring in new opportunities and encourage SMEs to adopt innovative & convenient solutions for customers. Exploring to unlock the potential of ICT and trying to build a future proof network knowing that internet and technology will transform the fabric of our SME will help us deliver on our purpose." 

"With all the restrictions the pandemic has imposed on us and with eroding revenue of businesses it is essential for SMEs to adopt ICT solutions and MFS to run their operations in the new normal. We are yet to ensure a more inclusive banking as a significant proportion of SMEs are yet to be brought under formal banking. We need to introduce branchless banking (digital banking) and this is where convergence of ICT solutions can help us democratize financial services to all the levels in the society as digital banking can play a huge role in bringing Micro SME(s) across the country under financial inclusion. Collaboration and persistent efforts among the industries to bring about more technological advancements
which are not just limited to payment-related services, Cash-in, cash-out transactions, and person-to-person (P2P) transactions and preventing cyber thefts can transform SMEs and enable them to sustain." said Solaiman Shukhon, Chief Public Affairs Officer at Nagad. 

Md. Zillur Rahman Khan, Managing Director of Shuganda Feed Mills that is based in the southern part of the country, told the Business Standard, "When the pandemic hit us last year, we suddenly faced an unprecedented situation as we were not sure whether we will be able to secure our investment."

"Right then, different ICT products (CMP, TT, VTS) and customized network solution (Repeater solution) offered by Grameenphone just saved us from incurring a huge loss. With the help of these simplified solutions, we managed our human resources and vehicles in a better way and improvised our operations by maintaining proper communication. Consequently, we could turn around rising out the uncertainties posed by the pandemic", he added.

Sayeed Al Noman, Founder & Vice Chairman, East Delta University, shared with The Business Standard, "Luckily, we could see the nationwide lockdown was coming and completed our preparation at the beginning of March 2020. We officially moved our teaching-learning activities online starting from March 18, 2020. The very next month, we launched another campaign, "Breaking Digital Divide," to make sure every student has quality internet access. We thank Grameenphone for responding to our call and be part of this incredible journey. From June 2020 until now, we continued to provide a 15GB Data Bundle to our students, faculty members, and admin staff to remain connected as a family."