Staff Correspondent

More than 74 per cent of the country’s SME entrepreneurs want to do business in compliance with the country’s laws and regulations, according to a study of SME Foundation.

However, there is a need to simplify the government's rules and regulations or introduce one-stop services, along with increasing collateral-free loans and other facilities for doing business in compliance with the country’s laws, the study observed.

Professor Dr Melita Mehjabeen of Dhaka University today presented the findings at a seminar titled ‘Informal SMEs in Bangladesh: Formalization Challenges and Way Forward’ at the Agargaon Tourism Building in the city, said a press release.

SME Foundation and German development agency Friedrich-Ebert-Stiftung (FES), Bangladesh, organized the seminar.

Industries adviser Adilur Rahman Khan attended it as the chief guest while senior secretary of the ministry Zakia Sultana was present as special guest.

Resident Representative of FES Bangladesh Dr Felix Gerdes and Program Head of International Labor Organization in Bangladesh Gunjan Dallakoti also spoke at the session.

Managing Director of SME Foundation Anwar Hossain Chowdhury chaired the event while General Manager of SME Foundation Md. Nazim Hasan Sattar delivered welcome speech at the seminar.

According to the study, some 57 per cent of SME entrepreneurs mentioned the tax structure as the main obstacle to doing business in compliance with the law while 54 per cent of entrepreneurs consider the trade license renewal process as an obstacle.

Some 51 per cent of entrepreneurs see the additional cost for trade licenses as an obstacle whereas 44 per cent say that the complexity of the government laws and regulations is also one of the barriers.

The research was conducted on 304 entrepreneurs from Dhaka, Chattogram, Sylhet, Khulna and Rajshahi.

The entrepreneurs said that in India only 7 certificates are required from various government departments to do business in compliance with the law but in Bangladesh they need certificates from at least 34 departments.

According to the 2013 Economic Survey of the Bureau of Statistics, there are more than 7.8 lakh CMSME establishments in the country, employing about 25 million people.

However, most of these institutions are informal or not under the government's laws, regulations and tax framework. In this situation, experts have recommended the government to prepare a comprehensive strategy paper to bring these institutions under the laws, regulations and tax framework, formalize them step by step, simplify the rules and regulations, and provide financial and non-financial incentives to such entrepreneurs.

SME entrepreneurs, representatives of various ministries and departments, SME chambers and associations, banks and financial institutions, researchers, economists and relevant stakeholders participated in the seminar.

The SME Foundation is implementing various programmes in accordance with the government's National Industrial Policy 2022, SME Policy 2019, UN SDG 2030 and government directives to develop the SME sector as a viable one for the country’s economic, social development.

Since its establishment in 2007, about two million small and medium entrepreneurs in the country are the beneficiaries from the various programmes of the SME Foundation.