A small-scale venture Jute Mart and Craft in Bangladesh manufactures and sells jute produces in local market. Before the coronavirus hit the country, the company had 10-12 workers at its Banasree factory. After March of 2020, 95 per cent of its work-orders were cancelled. And there was no fresh work-order coming. Proprietor of the business Khaleda Sultana did not receive positive response after applying for funds from the government-announced stimulus package.
To survive in the business, Khaleda shortened the production capacity and shifted the factory to Mohanagar Project area. And to cut production costs, the pool of permanent employees shrunk into two with 20-25 contractual workers.
However, the good news is that Jute Mart and Craft has been receiving fresh work orders gradually. An export order from the United States is almost final.
Khaleda Sultana recently told Prothom Alo, “Managing the working capital is now a big problem and running production against the work-orders amid fund crunch is very challenging”.
“Investment of only Tk 100,000 working capital in a month is enough to manage the business well,” she said.
Like the Jute Mart and Craft, other cottage, micro, small and medium enterprises (CMSME) are in difficulty as they cannot run their business smoothly due to the pandemic. Most of them did not receive any support from the government-announced stimulus package. The surviving enterprises are facing capital crunch.
There are at least 7.8 million CMSMEs across the country. Among them, 4,200 enterprises were surveyed by Dhaka Chamber of Commerce and Industry (DCCI) recently. The survey report finds that 26-75 per cent of CMSMEs are affected by one way or another because of the pandemic. Among the CMSMES, 97 per cent have curtailed their production capacity.
Talking about the issue, DCCI president Rizwan Rahman told Prothom Alo that big and medium enterprises have withdrawn most of the stimulus funds that the government had announced to help restore business.
Due to communication gap and complex documentation, small enterprises failed to avail the fund. “Bangladesh Bank should bind the commercial banks to distribute loans among businesses following their contribution to economy. Meanwhile, facilitating CMSMEs with rebate on installments against loan till the end of pandemic is crucial,” he said.
Private-run educational institutions, tour operators, owners of hotel and restaurants and transport-related people are the most affected sectors by the pandemic. As it has been continuing, the vulnerable groups are now struggling hard to survive. Excluding a few exceptions, most of the affected businesses are deprived of the government-announced stimulus.
Tour operators are the most affected ones in the tourism sector. Due to the Covid-19 restrictions, they have not been able to operate inbound and outbound tours. They are passing days idly.
Tour Operators Association of Bangladesh president Md Rafeuzzaman said, continuation of the pandemic will put the small enterprises into difficult situation. Many of them already have planned to shift from their business.
SME Foundation managing director Md Mofizur Rahman told Prothom Alo, market share of the small enterprises has shrunk due to the pandemic. Many small businesses are on the verge of closing down due to their inability to pay shop rent or bank installments. They were affected hugely as they could not make good business in last three festivals.
“The SME Foundations needs to be a smart organisation to address difficulties of the small enterprises. Regular budget allocation by the government is a necessity,’ Mofizur Rahman said.