SOUTHEAST UNIVERSITY

Assignment
Final Assignment
Course Title: Financial Management
Course Code: FIN 2122
Set Code: A

Submitted to:
Syeda Tanjila Shahnewaz
Lecturer
Southeast Business School
MBA (FIN& Banking) IIUC
BBA (FIN & Banking) IIUC

Submitted By:
Md. Toriqul Islam
Id: 2018010000124

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Introduction

The novel Corona virus has already caused deadly all over the world. It affected more than 180
countries and the spread is still rising day by day. Rich countries USA, UK, China, Germany,
Italy and Spain are all struggling helplessly. The virus impact on the world economy since it first
broke out in December last year.

In 2019 GDP growth rate of Bangladesh was 8.15 percent. Due to the current situation,
expected GDP of 2020 is 5.2 %. (Source: https://www.adb.org/countries/bangladesh/economy)

The novel coronavirus impact every sector of business specially SME. SME sector will
completely fall down if it’s continued few more months.

Methodology

All information on this report collected as secondary data. Data collected from different scarce
of internet. Different web page, report and article.

Literature review

Small and Medium Enterprises (SMEs) play an important role in the economic development of a
country. SME’s role in terms of production, employment generation, contribution to exports and
facilitating equitable distribution of income is very critical.

According to the Bangladesh Bureau of Statistics, there are about 78 lakh SMEs in Bangladesh,
with 25 million workers working in the SME sector. According to a BIDS report, there has been
an overall decrease in revenue in the SME sector of about 66 percent (FY2019-20)

Analysis & Discussion

The Government of Bangladesh has announced a package to support small and medium
enterprises (SMEs) with a portion of interest payments for the current fiscal year ending June
30, 2020.

LightCastle Partners & Sheba.xyz collaborate on an independent study about the COVID-19
Impact on the SMEs of Bangladesh”. The survey was held in late April with over 230 SME
respondents from all over Bangladesh covering industries involving Trading & Production
(48.4%) that includes Perishable & Grains, Dairy, Poultry, Fisheries, Jute Diversified Products,
and Retail Store; and Service Industry (51.6%) that includes food catering, beauty salon,
electrician services, MFS agent, laundry, and restaurants.

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With more than 50 % of the country's small enterprises reportedly shut, there is a growing
discontent among stakeholders and respective trade and industry associations as to whether
the government's plans to revamp the huge and largely disorganized SME sector comprising
scores of sub-sectors would bring the intended benefit.

According to a survey about “Covid-19 and SMEs. Understanding the Immediate Impact and
Coping Strategies” annual revenue in SME reduced by 67% in 2020 compared to 2019.

Bangladesh Institute of Development Studies (BIDS) conducted the survey over 375 enterprises
and 360 workers during April 26 to May 10, 2020. As per the survey findings of the surveyed
entrepreneurs, 76% goods produced by the entrepreneurs remain unsold and the value of
unsold goods is Tk6.75 lakh each.

If this lockdown continues for more than a few months, they will be in tremendous trouble and
the outcome will be tremendous. Many SMEs will be forced to shut down, it will trigger higher
rates of unemployment in the country, as many people will lose their jobs. Others will lose their
capacity of paying rent, utility bills, and salaries. Many will literally be classified as defaulters.
They will lose the capacity to pay interest as they are not earning a single penny during this
time.

Recommendation

Bangladesh Bank may consult with the government and formulate a policy to waive its interest
during the shutdown period. The people who involved in the SME sector will need money to run
their families. Therefore, the government must focus on their survival, cash flow during this
pandemic. The government should formulate a policy for the post-pandemic crisis. To address
this crisis, the government can make a fund of Taka 5,000 crore for the SMEs. So that they can
borrow and repay at easy terms and affordable rates. For this, the government will have to act
with wisdom, patience and prudence formulate a strategy. Government should reduce tax rate
or give a chance to may tax next financial years.

Conclusion

More than 15% of the population in Bangladesh related to SMEs. It’s a big and growing sector.
But for an outbreak of COVID-19 SMEs sector is pulling back. All most SME business facing
loss in a pandemic situation. In our country government take a step to reestablishing SMEs
sector. Hope it will help to our SMEs sector to rebuild the business.

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Reference

https://www.lightcastlebd.com/insights/2020/05/09/covid-19-impact-on-the-sme-sector-of-
bangladesh

https://thefinancialexpress.com.bd/views/the-divide-between-small-and-medium-enterprises-
1595953193

https://www.dhakatribune.com/business/2020/06/24/covid-19-pandemic-76-products-of-smes-
remain-unsold

https://tbsnews.net/thoughts/covid-19-unprecedented-shock-smes-65671

https://www.thedailystar.net/coronavirus-deadly-new-threat/news/the-impact-covid-19-small-
businesses-1939197

https://www.thedailystar.net/round-tables/news/supporting-small-and-medium-enterprises-
through-the-covid-19-pandemic-1955173

https://sunbusinessnetwork.org/thoughts-on-the-strategic-bailout-of-smes-in-bangladesh/

: https://www.adb.org/countries/bangladesh/economy

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