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Title : Bangladesh Industry sector benefited by SME’s market. MD. Shahnewaz Shohan1

Introduction: The elaboration of SME is small and medium-sized enterprise. The Least Developed Countries (LDCs) in the east have started refocusing their attention on SMEs to enhance their role in bringing about structural changes in their economies. For Bangladesh SMEs have assumed special significance for poverty reduction programs and potential contribution to the overall industrial and economic growth through SMEs internationalization process. And gradually there emerges more importance of the SME financing in our country. Objectives of the Study: The objectives of this study are as follows: 1. To identify whether SME financing plays any role in changing the occupation of the beneficiaries. 2. 3. To detect whether SME financing plays any role in employment status of the beneficiaries. To identify whether it plays any role on the labour force participation rate of the beneficiary households. 4. To assess whether it plays any role in enhancing the working hours of the beneficiaries.

Research question:
1. How does SME financing play any role in changing the occupation of the beneficiaries? 2. Does SME financing play any role in employment status of the beneficiaries? Methodology of the Study: This study necessitates applying empirical and statistical aid to analyses impact of SME financing on occupation and employment. Empirical and statistical methods are used to strengthen the evidential pillar of the study which helps enabling readers to believe the facts. In this regard, both primary and secondary data would be used. Review of Literature SME sector has played a vital role in economic development of some prosperous countries of Asia. Our neighboring countries have also given due importance on SME. Terming SME as „employment generating machine‟ they stressed on SME development for higher economic growth, narrowing the gap of income inequality and poverty alleviation. The present government has also put much emphasis on the development of SME sector considering it as „the driving force for industrialization.

Masters Research Student, Dept. of Economics

Anwar Ullah (2006) conducted a study entitled “SMEs in Bangladesh and Their Financing: An Analysis and Some Recommendations” indicating that small and Medium Enterprises (SMEs) are accounting for 25 percent of GDP. This paper also analyzes the major constraints that BRAC Bank faces in accelerating this program. savings investment. 80 percent of industrial jobs. poor financial disclosure on account of tax issues. geographical diversity and high mortality. if they flourish. savings.the poor women brought significant changes in their life in terms of income. Banks are reluctant to expand their SME credit portfolio because they do not . education. The major findings of the study are. Uddin (2008) has stated that the economic efficiency and overall performance of the SMEs especially in the developing countries are considerably dependent upon macroeconomic policy environment and specific promotion policies pursued for their benefit. technology.” The purpose of writing this paper is to examine the impact of SME program of BRAC Bank on poverty alleviation of poor women in Bangladesh. and 25 percent of the total labour force in Bangladesh even though the prospective sector gets negligible facilitation from different support service providers. purchasing power etc after getting SME loan. Both primary and secondary data have been used in this study. housing etc that ultimately alleviate poverty in Bangladesh? Does SME program truly work for the alleviation of poverty among poor women? This paper seeks to answer all these questions. Obviously. There are various constraints that hinder the development of SMEs in Bangladesh. cash intensity in transactions. Chowdhury (2007) highlighted that in context of Bangladesh SME is characterized by Low capitalization and limited assets. limited access to market opportunities. What is the main focus of SME program and what the SME can do for the development of Bangladesh? Does SME program of BRAC Bank bring any positive changes in life of poor women in terms of income level. Lack of suitable incentives. high risk perception has led to high borrowing costs. and expertise and business information. investment. Ahmed (2006) observed that availability of finance is a major constraint to formation and growth of SMEs in Bangladesh. the government has many things to do to flourish the SMEs because. very limited access to formal source of credit. Shamsul Alam and Md. poor credit knowledge. This paper is an academic analysis toward policy formulation in respect of SME financing. generate more jobs and contribute to a great extent to the national economy. inefficient and limited services from relevant government agencies as well as poor capacity of entrepreneurs are other reasons for the slow growth of SMEs. such as lack of medium to long-term credit.Faraha Nawaz (2009) conducted a study entitled “Small Medium Enterprise (SME) Program of BRAC Bank: Its Impact on Poverty Alleviation Among Poor Women in Bangladesh. SMEs will create new entrepreneurs. Md. very limited record keeping habit.

2011) under Policy Research Working Paper held out a report entitled “Small and Medium Enterprises: A Cross-Country Analysis with a New Data Set. lack of skilled technicians and workers. That‟s why I am interested to research on this topic. difficulties in accessing technology. The best option for Bangladesh is to improve its deep-level competitiveness by reducing total “production and distribution” time.consider SME lending an attractive and profitable undertaking. fierce competition. to retain competitiveness in the national and international market. and product quality. The Daily Star in its editorial (2006) mentioned that many SME owners are to face difficulties when they require bank loans. With this great opportunity f o r internationalization the situation will be very competitive and challenging for the owners of SMEs to survive in the market in the battle of price war. Many people are study in SME‟s industry. Innovation: In a study about SME sector of Bangladesh Miah (2007) stated that the major constraints for SMEs are lack of adequate investment. poor physical infrastructure and high transportation cost. Bangladesh faces significant constraints in this regard and hence it is not possible to establish strong backward linkages overnight. low awareness. constraint of quality of human resources. predicting the global small and medium . there has been an increased interest in the role of small and medium enterprises in job creation and economic growth. Conclusion: The World Bank. In addition. credit constraints. Financial and Private Sector Development and Consultative Group to Assist the Poor (January. An important precondition for implementing that strategy is the existence of a strong domestic SME industry.” In the aftermath of the global financial crisis of 2008–2009. Significance of this Study: In Bangladesh the SME sector is contributing more than 25% of the total GDP. absence of effective and transparent legal system. they are given much theory I would like to given a special theme for this sector in Bangladesh. Bangladesh has to think of other alternatives. it provides the first set of results of analyses with this new dataset. high rate of interest on bank loans. lack of modern technology. With this potentiality if we consider the trade liberalization or internationalization then this sector becomes very lucrative for generating m u c h m o r e profit to the successful entrepreneur s. irregular/inadequate supply of power. In fact. poor information about market opportunities and requirements. low lobbying capacity. rapid changes in policy environment. However the lack of consistent indicators at the country level restricts extensive cross-country analyses of lending to small and medium enterprises. SME financing has recently been identified by experts as one of the major problems faced by SMEs in Bangladesh. product offering. which will improve surface-level competitiveness by reducing lead time. And the situation requires the more availability of SMEs financing in the economy. Therefore. low access to business services. insufficient assets and their inability to comply with collateral requirements of the banks. This paper introduces a new dataset to fill this gap in the small and medium enterprise data landscape. This is so because SMEs are regarded as high risk borrowers because of their low capitalization. inadequate availability of raw materials. lack of research & development facilities. So the economic escalation and poverty alleviation of this country becomes the opposite side of a coin with SMEs development. Administrative costs are also higher because close monitoring and supervision the SME operation becomes necessary. The most urgent and important task for the Bangladesh SME industry is shortening the lead time.

SMEs in Bangladesh and Their Financing: An Analysis and Some Recommendations. Note that although a unique small and medium enterprise definition does not exist. Dhaka. On average. The bulk of this volume. A Ullah. Bibliography: 1. 70 percent. is in high-income countries. differences in definitions across countries are not statistically significant in explaining the differences in small and medium enterprise lending volumes. 2. 1998. 2008. Constraints to SME Development in Bangladesh. Islam Tasmin. Hossain Nazmul. Khulna University. 3. Competitiveness.enterprise lending volume to be $10 trillion. 2006. Alam. S. Challenges and Prospects of SMEs in Bangladesh forInternationalization. Dhaka. . small and medium enterprise loans constitute 13 percent of gross domestic product in developed countries and 3 percent in developing countries.