Key Challenges and Barriers Facing Small and Medium Enterprises (SMEs) in Bangladesh (original) (raw)
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Small and Medium Enterprises Development in Bangladesh: Problems and Prospects
Small and medium sized enterprises (SMEs) are playing increasingly important role as engines of economic growth in many countries including ours. SMEs provide low cost employment opportunities and render flexibility to the economy. Many of the SMEs are engaged in export activities suggesting that they are internationally competitive. Considering the importance of SME sector in the economy of Bangladesh and understanding the constraints under which such enterprises operate, it is evident that policies to support the development and growth of SMEs are necessary. In the policy strategies, smooth and sustainable development of SMEs all over the country will be considered as one of the vehicles for poverty alleviation, and generation of more employment. An attempt has been made in this paper to identify major financing constraints faced by SMEs in Bangladesh and suggest some policy measures to overcome those constraints.
2011
Small and medium sized enterprises (SMEs) are playing increasingly important role as engines of economic growth in many countries including ours. SMEs provide low cost employment opportunities and render flexibility to the economy. Many of the SMEs are engaged in export activities suggesting that they are internationally competitive. Considering the importance of SME sector in the economy of Bangladesh and understanding the constraints under which such enterprises operate, it is evident that policies to support the development and growth of SMEs are necessary. In the policy strategies, smooth and sustainable development of SMEs all over the country will be considered as one of the vehicles for poverty alleviation, and generation of more employment. An attempt has been made in this paper to identify major financing constraints faced by SMEs in Bangladesh and suggest some policy measures to overcome those constraints.
On the Road to SME Sector Development in Bangladesh
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Entrepreneurship has been deliberated as multidimensional and multidisciplinary study. From the economic point of view entrepreneurship is the central force for economic development for any nation. Scholars and policy makers now have started to see entrepreneurship as panacea for inclusive growth. Entrepreneurships are most widely popular and discussed area. Study on small and medium sized enterprises (SMEs) has been maturing for the last decade as it has been regarded as significant player for the social development along with the economic development. In Bangladesh, SMEs account for a large proportion of the total establishments in various sectors. Considering the importance of the SME sector in Bangladesh, this study intends to explore and sketch-out the landscape of current SME setting in Bangladesh. With this aim the study has extensively carried out literature review, observed and understood the secondary data obtained from various organizations, and finally presented a policy...
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Nowadays, small and Medium Enterprises (SMEs) have become an essential sector that is supposed to play a significant role in enhancing the economy of Bangladesh. The role of the SME sector can be immense in poverty reduction from the country. However, the SME sector is still facing significant challenges that reduced its potential in developing the economy. Such situations can be tackled by introducing Proper Implementation and Monitoring of Policy Measures, government initiatives and Enhancing Access to SME Finance to accelerate the further development of SMEs. This study mainly aims to assess the present scenario and performance of SME sector in Bangladesh especially in terms of employee turnover rate, quality assurance, allocation of funds, marketing activities, etc. and also identify the problems of SME sector in Bangladesh and suggest recommendations to overcome the problems. This study uses various literature, Bangladesh Bank data for FY 2010-18, and publications from Banglade...
The European Journal of Applied Economics, 2018
Small and Medium Enterprises (SMEs) are the significant contributor to the Bangladesh economy as they have the competency to create higher employment, improve local technology, and create ground for the future sustainable industrialization and corporate sectors. The aim of this study is to identify major constraints faced by the SMEs in Bangladesh. A cross-sectional study was conducted in Narsingdi Municipality, Bangladesh and social survey method was applied to collect the data. Two-stage cluster sampling method was utilized to select respondents and data were collected through face-to-face interview. Principal Component Analysis (PCA) was used to determine significant constraints to SMEs. The study found that poor infrastructure and electricity supply are the main constraints to the development of SMEs. Limited access to credit, lack of proper business knowledge and plan, high domestic market competition, lack of skilled manpower and technology, and high cost of raw materials and equipment are the major constraints next to main constraint.
Factors Determining the Success of SMEs in Bangladesh
1st International Conference on Entrepreneurship, SMEs Development and Management (ICESMD2013), 2013
There is a paramount importance of SME entrepreneurs in a developing economy like Bangladesh. It is often perceived as the prime component of Bangladesh economy. These sector produces and distributes products and services to hundred sixty million people of Bangladesh. Therefore, the success of this sector determines economic status of the economy of Bangladesh which is dependent on a number of factors. Hence, this study aims at identifying the factors that are the instrumental to the success of the SMEs in Bangladesh. By reviewing an extensive literature, the study identified a number of factors that are the determinants of the success of the SMEs. One hundred and thirty two data have been collected from the different types of SME entrepreneurs involved in small manufacturing, wholesaling, retailing, and the like. The factors were reduced to eight factors by using a multivariate statistical technique like Factor Analysis. Multiple Regressions have been performed to identify the significant factors from the factors identified by Factor Analysis. Results show that the success of the SMEs is determined by the entrepreneur's authority on business and the market strategy followed, nature and type of business and financial supports, management know-how, use of modern technology, market accessibility and the networking, government policy and support, favorable external environment, and the owner's personal qualities. This study suggests that the SMEs entrepreneurs must have the command over their businesses and must follow proper marketing strategies for the success of their businesses.
Development of Small and Medium Scale Enterprise in Bangladesh: Prospects and Constraints
SSRN Electronic Journal, 2010
The Small and Medium scale Enterprise (SME) working as the engines of economic growth. Promotion of SME especially in the developing countries like Bangladesh include their relatively high labor intensity, dependence on indigenous skills and technology, contributions to entrepreneurship development and innovativeness and growth of industrial linkages. The growing economic significance of the SMEs as sources of new business creation and employment generation. Bangladesh followed a development strategy in which private investment was controlled through a host of regulations involving investment sanctioning, credit disbursement, import licensing, foreign exchange allocation, etc. While these regulatory barriers dissatisfied private investment in general, the impact fell unevenly on SMEs. This was because of the relative inability of the SMEs to cope with the regulations compared to their large-scale counterparts. Today there is a widespread perception that most of the laws under which the small and medium scale institutions are operating seem to have fallen short in dealing with their institutional and operational aspects. The lending institutions should be encouraged to emphasize on the relationship lending technologies, which is based on "soft" information. The soft information may include the character and reliability of the SME's owner based on direct contact over time by the institution's loan officer; the payment and receipt history of the SME gathered from the past provision of loans, deposits, or other services to the SME by the institution; or the future prospects of the SME garnered from past communications with SME's suppliers, customers, or neighboring businesses. Banking norms and attitudes towards SME financing should be changed as because small enterprises differ considerably from the traditional clientele and do not conform to the norms detailed in the manual of banking norms and procedures
Factors affecting business success of Small and Medium Enterprises (SMEs) in Bangladesh
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This study examines determinants for small business success in Bangla Desh. These include: characteristic of SMEs, their management and know-how, products and services, style of doing business, financial and other resources and external environment. Such study has not been conducted before in the context of Bangla Desh. Findings of the study are useful for entrepreneurs and policy makers. Study is based on survey methodology through a questionnaire administered on the employees of small firms. Data is analyzed using SPSS. Six hypotheses are proposed and tested. Most significant factors affecting business success of SMEs in Bangladesh were found to be products and services, the way of doing business, management know-how and, external environment. This study has implications for entrepreneurs and policy makers.
Constraints of Manufacture based Small and Medium Enterprise (SME) Development in Bangladesh
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Small and medium enterprises (henceforth, SMEs) play a key role in economic growth and industrial development of a country. They make vital contributions in improving economic and social sectors of a country through stimulating large scale employment, investment, development of indigenous skill and technology, promotion of entrepreneurship and innovativeness, enhancing exports, and also building an industrial base at different scales. SMEs worldwide have been benefited from the combined interactions of forces of product mix, location factors, and market advantages. However, evidences also suggest that there are cases of SME failures. Growth of SMEs is constrained by many factors. Many SMEs occasionally go on growing into large firms. This paper looks for identifying such constraints of manufacture based SME Development in Bangladesh. From the study, it has been identified that, lack of utility facilities, for example, electricity, gas and water, frequent changes of the prices of raw...