Small Business
ASA University Review, Vol. 5 No. 1, January–June, 2011
Small and Medium Enterprises Development in Bangladesh: Problems and Prospects
A.K.M. Helal uz Zaman* Md. Jahirul Islam**
Abstract
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.
Key words: SME, development, income, employment generation, poverty reduction, financing constraints, prospects for SMEs.
Introduction
Small and Medium sized Enterprises (SMEs) have drawn a lot of interest among policy makers, academics, businessmen and people in general. There is a broad consensus that a vibrant SME sector is one of the principal driving forces in the development of the economy of Bangladesh. SMEs stimulate private ownership and entrepreneurial skills and can adapt quickly to changing market situation, generate employment, help diversify economic activities, and make a significant contribution to exports and trade. Therefore, policies and initiatives to develop SMEs and to increase their competitiveness are a priority for Bangladesh. Liberalization of the economy along with rapid globalization has posed severe challenges to SMEs not only
Small and Medium Enterprises Development in Bangladesh: Problems and Prospects
A.K.M. Helal uz Zaman* Md. Jahirul Islam**
Abstract
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.
Key words: SME, development, income, employment generation, poverty reduction, financing constraints, prospects for SMEs.
Introduction
Small and Medium sized Enterprises (SMEs) have drawn a lot of interest among policy makers, academics, businessmen and people in general. There is a broad consensus that a vibrant SME sector is one of the principal driving forces in the development of the economy of Bangladesh. SMEs stimulate private ownership and entrepreneurial skills and can adapt quickly to changing market situation, generate employment, help diversify economic activities, and make a significant contribution to exports and trade. Therefore, policies and initiatives to develop SMEs and to increase their competitiveness are a priority for Bangladesh. Liberalization of the economy along with rapid globalization has posed severe challenges to SMEs not only
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