Bail out small and medium businesses to keep economy running04 May 2021
According to a new survey, the confidence among businesses about economic recovery of Bangladesh has hit the rock bottom as an alarming surge in coronavirus infections has deepened the uncertainty. Insufficient allocation, lengthy procedure, difficulty in bank-related services, and lack of information about the procedure left 68 per cent of businesses unable to avail the government's stimulus packages, while 9 per cent of the businesses do not even know of the facilities, the survey reveals.
The South Asian Network on Economic Modeling (SANEM) in collaboration with The Asia Foundation conducted the 4th round of a nationwide firm-level survey with 500 business entities from April 6 to 18, 2021. The Business Confidence Index showed the overall confidence was at peak 57 points out of 100 in the previous quarter, which has come down to 41 points now, the SANEM unveiled the information in a webinar on Sunday.
Experts said that big firms are doing well as they have better access to government policymakers. As they are big, they are strong enough to reach their voices. That could be the reason for big firms getting more access to stimulus packages. Moreover, they said, rather than going to 100 SMEs, the banks prefer to go to 10 medium to big firms. The survey showed that only 9 per cent small businesses availed the stimulus, in medium businesses 30 per cent took the same and large businesses received 46 percent of the stimulus funds. Small and medium enterprises, from all sectors, should get a priority in channeling the loans from stimulus packages. Otherwise, the economy might come to a halt again, the survey says.
It may be noted that following the announcement of the stimulus packages, relevant quarters, including economists and analysts, were worried that the benefits of the package might not actually reach the target groups. It is the 'bank-customer relationship' that while playing the decisive role in dishing out loans to prospective clients would deprive micro enterprises from benefiting from the government announced stimulus package. There was thus a strong feeling that unless access to loans by small and micro enterprises are significantly eased, the objective of the government to reach out to these firms might not succeed. This has now been happening.
Now, what we need is an independent evaluation of the packages that have been executed so far. And the authorities should make adjustments to the packages whose implementation is lagging behind.