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Entrepreneurship

Entrepreneurship

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Published by Usha Nandhini
Finance for being an entrepreneur in Bangladesh
Finance for being an entrepreneur in Bangladesh

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Categories:Types, Business/Law
Published by: Usha Nandhini on Jul 27, 2010
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11/13/2012

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ENTREPRENEURSHIP

Entrepreneurship the organizing factor in the process of production. It embraces activities of entrepreneurs relating to such economic decisions as what to produce, how much to produce and what method of production to adopt. • • In the sole proprietor firms, the entrepreneur accepts the financial risk of the enterprise and is solely responsible for its management. In a public company, these two functions are divided between shareholders.

INSTITUITIONAL SORCE OF FINANCE FOR ENTREPRENEURS IN BANGLADESH
• • • • • • BANGLADESH SMALL AND COTTAGE INDUSTRIES CORPORATION (BSCIC) BANGLADESH SHILPA RIN SANGSTHA (BSRS) BANGLADESH SHILPA BANK (BSB) INVESTMENT CORPORATION OF BANGLADESH (ICB) NATIONALISED COMMERCIAL BANKS (NCBs) PRIVATE BANKS

Entrepreneurs in Bangladesh mobilize capital from the stock market. BSB and BSRS have so far provided term loans to establish 1,575 and 424 industrial undertakings respectively. Besides, the Bangladesh Small and Cottage Industries Corporation (BSCIC) under its different programmes has so far facilitated the creation of around 18,000 entrepreneurs engaged in small enterprise. ICB has so far provided underwriting, bridge financing, equity financing, debenture financing etc. to over 400 public limited companies. BSCIC industrial estates and EXPORT PROCESSING ZONE (EPZ) authorities have provided a large number of entrepreneurs with infrastructural facilities including land for industrial location, water, power, sewerage, gas, telephone, extension and counseling services and store and warehousing facilities. In Bangladesh quite a number of entrepreneurial ventures have been the creation of corporate spin-offs. They embarked upon new ventures with the experience and skill that they gathered while serving an enterprise. These spin-offs have been found to be very successful because they have the necessary experience and skill in managing and running an enterprise. What they needed was only a little back-up support. Such support gave

them a big push and they proved themselves to be very successful as entrepreneurs. In Bangladesh the GARMENT INDUSTRY has been the creation of spin-offs. Similarly, many chemical engineers starting their career in the Chemical Industries Corporation ultimately left their jobs and started new chemical/ pharmaceuticals enterprises. A special group of entrepreneurs, creators of the corporate new ventures, identified technically as intrapreneurs, create new products and processes within large organizations. They do not start a new enterprise or industry but create new products with their innovative and inventive ideas. Their corporate entrepreneurship opens up new horizons of opportunities for the corporate structure where they serve. The establishment of many new chemical plants/product lines under Bangladesh Chemical Industries Corporation is an example of corporate entrepreneurship. State patronage plays a significant role in the growth of entrepreneurship in Bangladesh. The elite of the society belonging to the defense forces, civil bureaucracy and different chambers and trade bodies, as well as bankers, politicians, doctors, contractors etc. turned into successful entrepreneurs under state patronage. Public policy favored the growth of such entrepreneurs in the country. A host of banks, insurance companies and buying houses had also developed under such entrepreneurship.

LIMITATIONS OF SMALL ENTREPRENEURS IN BANGLADESH
• • • • • • • Lack of precision tools Out dated or obsolete machinery Lack of technical and training assistance Shortage of funds Insufficient space Lack of designs and samples Lack of quality raw materials

In many countries of the world like India, Japan, South Korea etc. subcontracting has been used as a unique and effective tool for the promotion of small and medium scale entrepreneurs. Sub-contracting as a concept in industrial development strategy began to gain ground in Bangladesh from the first Five Year Plan (1973-78). The Fifth Five Year Plan (1997-2002) also laid special emphasis on the growth and development of linkage and sub-contracting amongst the big, medium and small industries. Various policy and promotional measures were also adopted to accelerate the development of sub-contracting in the country. But apart from a few multinational companies like Bata Shoe Company and Bangladesh Tobacco Company Limited, public sector enterprises have not developed a positive

attitude towards this system. An import-biased policy and fiscal anomaly also impede its proper development. Following the trends in entrepreneurship education in the USA, the countries of west Europe, Japan, India and Philippines, separate programmes have been launched in Bangladesh for educated youths and women to train in entrepreneurship. Specialized entrepreneurship courses have been included in the undergraduate and graduate programmes of business education. BANGLADESH BANK in association with commercial banks and the Bangladesh Institute of Management launched an Entrepreneurial Development Programme for educated unemployed youths. Similarly, BSCIC, in association with USAID initiated a Women Entrepreneurship Development Programme. However, it is not clearly known how many new entrepreneurs have been created as a result of the training and education.

ENTREPRENEURIAL VENTURES IN BANGLADESH
• • • • • • • • COTTON HANDICRAFTS TEXTILES JAMDANI SILK JUTE GARMENT INDUSTRY CHEMICAL/PHARMACEUTICAL INDUSTRIES

INSTITUITIONAL ASSISTANCE TO THE ENTREPRENEURIAL VENTURES
Cotton Development Board (CDB) established in 1972 with the primary objective to introduce and promote COTTON cultivation. During the early period, the Board could not do any substantial work. However, after the introduction of a new variety of seed from the USA in 1977, cotton cultivation in the country was strengthened, and the production reached to about 30,000 bales in 1983-84. After few years the production declined to about 12,000 bales because of the degeneration of the only imported variety, deterioration of quality, and lack of marketing. The Cotton Development Board has so far released eight varieties. Cotton cultivation in the country has now increased to about 34,642 ha producing 73,710 bales, which can meet about 16% of the total cotton requirement of the country. Handicrafts products from family based small manufacturing units. Some handicraft products often have identifying features such as traditional or artistic deriving from the region or country of production by craftsmen, working generally on a COTTAGE INDUSTRY basis. The customer-

oriented definition of handicrafts suggests that it is the creative expression of a group of people with unique artistic skills who apply their talents to the production of material goods, which reflect their culture and heritage. The most important industries in Bangladesh in early and medieval times comprised handicrafts and cottage industries. Prominent amongst them were TEXTILES, metal works, jewelry, wood works, CANE and BAMBOO works, and clay and POTERY. Later, JUTE and leather became the major raw materials for handicrafts. The result is a fascinating variety of baskets, pottery, wall hangings, handbags, travel kits, toys, ashtrays, carpets, embroidered quilts, and so on. These products are characterised by utility, sustainability and environment friendliness blended with aesthetics appeal and are suitable for everyday use. The most predominant features of Bangladeshi handicrafts are the extensive use of individual skill and the interesting design motifs. Artisans skilled workmen sometimes designated as craftsmen. Artisans are creative and ingenious people who make things manually. Historically and traditionally, this group of people has been associated with making artefacts, crafts, and equipment that are considered to be important gradients for the growth of civilisation. Civilisation is nothing but what we have and incorporates the characteristic performances of artisans. There is however, a distinction between artisans and occupational groups. All artisans essentially belong to an occupational group while not alloccupational groups are artisans. Silk A delicate and soft fibre produced by the silkworm Bombyx mori to make their cocoons and covered with sericin, a protein. Three types of silk have long been produced in Bengal. The mulberry silk is generally considered the most valuable. After 1971, the government of Bangladesh developed a more systematic policy towards silk. New development programmes for the sector were undertaken with the help of foreign aid and expertise, particularly from Switzerland. In 1977, the BANGLADESH SERICULTURE BOARD was created to coordinate activities in the silk sector. Performance consistently fell short of the targets set and the growth was slow. In the 1980s, an evaluation team judged that 'sericulture now occupies a very minor place in governmental efforts, though its role as a generator of rural employment and income can be highly significant'. Several NON-GOVERNMENT ORGANIZATIONS became involved in silk production, particularly through spreading to areas, which had no surviving tradition of silk production. Although there were some local success, most experiments failed to yield effective results. Yet, by the late 1980s, the national mulberry area expanded to no more than 3,000 hectares and the silk sector provided employment to about 50,000 people. The productivity of Bangladesh silk producers was about half of that of their Indian counterparts.

In Bangladesh quite a number of entrepreneurial ventures have been the creation of corporate spin-offs. They embarked upon new ventures with the experience and skill that they gathered while serving an enterprise. These spin-offs have been found to be very successful because they have the necessary experience and skill in managing and running an enterprise. What they needed was only a little back-up support. Such support gave them a big push and they proved themselves to be very successful as entrepreneurs. In Bangladesh the GARMENT INDUSTRY has been the creation of spin-offs. Similarly, many chemical engineers starting their career in the Chemical Industries Corporation ultimately left their jobs and started new chemical/ pharmaceuticals enterprises.

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