Press Release

In-country returnee migrants are among the most vulnerable communities amid COVID-19 in the country, observed Ferdaus Ara Begum, CEO, BUILD. She said that around 4.5 lacs external migrants have returned to the country amid the pandemic, somehow might have some savings. In contrast, in-country migrants are more vulnerable and almost jobless. She was speaking in a virtual dialogue on Enhancing Opportunities for In-country Returnee Migrants and MSMEs: A Case of Southwest Bangladesh on 20 September 2021 organised by Business Initiative Leading Development (BUILD) in collaboration with PROKAS, British Council and Foreign, Commonwealth and Development Office (FCDO), UK. While there are programs for overseas returnee migrants, in-country migrants are often under the radar for dedicated stimulus support. She also shed light on the BUILD study on the domestic in-country returnee migrants in the Mongla-Bagerhat region.

The objectives of the dialogue were to share the findings of the BUILD’s survey about in-country returnee migrants from Southwest Bangladesh with relevant stakeholders, understand their views, and discuss and deliberate on potential courses of action for improving the situation.

Sharifa Khan, Secretary (Industry and Energy Division), Planning Commission as the Chief Guest of the dialogue, said that new employment opportunity is a major factor of in-country migration in the country. She referred to the Reintegration of Returnee Migrants program of the government of BDT 427 crore to provide skill-based training and financial support to the returnee migrants in FY 2020-21. She said that the vulnerable in-returnee migrants could be included in the program. She also referred to the rigorous countrywide training programs under Bangladesh Industrial Technical Assistance Centre (BITAC), which can facilitate the unemployed male and female people in the country. She said that the government had announced several programs under financial support and skill development programs for the marginal inhabitants and other targeted groups. She noted that the internal and external affected migrants could communicate with the Wage Earners’ Welfare Board (WEWB) to receive support. She also raised the aspect of migration opportunities and requested to produce specific proposals so that they could be adequately reached.

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The bank-client relationship is not the only criteria for the stimulus package; instead, the loan can be given based on books of accounts as per the circular observed by Abu Farah Md. Nasser, Deputy Governor, Bangladesh Bank. He spoke at the 9th Financial Sector Development Working Committee (FSDWC) Meeting organised virtually by Business Initiative Leading Development (BUILD) on September 22, 2021. Abu Farah Md. Nasser, Deputy Governor, Bangladesh Bank (BB), and N. K. A. Mobin, Acting President of Dhaka Chamber of Commerce and Industry (DCCI), co-chaired the meeting.

The Deputy Governor of Bangladesh Bank also observed that currently, banks like Brac Bank are improving the modalities of SME banking. CGS has been implemented for the collateral-free loan. In each division of the country, collateral-free loan lending has been prioritised. 10% collateral-free loan has been directed to provide to the women entrepreneurs. 8% of the total loan has to be gone to the women entrepreneurs at 5% interest. 1% incentive has been announced for both women entrepreneurs and banks for recognising good borrowers. Abu Farah Md. Nasser informed the meeting that the Ministry of Industries has already been requested to bring alternatives for trade licenses for the cottage, micro, and small enterprises to resolve the trade license issue in lending. He informed that Bangladesh Bank had introduced a new BDT 500 crore collateral-free loan scheme through agent banking, MFS, and bank sub-branch to finance rural and ultra-poor individuals and businesses. The scheme would follow the model of Leno financing to process loan applications in the shortest possible time and funding at the grassroots level. He further added that the central bank had implemented policies to ensure banks’ liquidity support and reduce the burden of the cost of funds for the private sector, especially CMSMEs. He also mentioned the initiative of Central Bank and World Bank in setting up an independent entity for payment gateway for CMSMEs. He emphasised the proactive initiatives of Bangladesh Bank and the country’s scheduled banks that up to June 2020, BDT 2,43,000 crore disbursement has been made to the SMEs by Banks.

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Bangladesh Bank manages the Green Transformation Fund (GTF) of USD 200 million and EUR 200 million. The GTF is intended to facilitate access to financing in foreign exchange by all manufacturer-exporters of all sectors to facilitate green or environment-friendly initiatives and harness green transformation.

Bangladesh Bank via FE Circular Letter No.23 has relaxed two conditions for state-owned commercial banks to participate in green transformation fund. Firstly, state-owned commercial banks (SCBs) with more than 10% Non-Performing Loans (NPL) will be able to borrow from GTF. Secondly, SCBs that have shortfalls in loan or investment provision, capital and liquidity will also be eligible to borrow from this fund.

Business Initiative Leading Development (BUILD) through the 7th Financial Sector Development Working Committee (FSDWC) meeting in 2019 and 3rd Sustainability and Green Growth Working Committee (SGGWC) meeting in 2021 proposed Bangladesh Bank to relax the loan policy for the state-owned commercial banks for GTF as a lot of textiles, and non-textile firms are the clients of these banks.

BUILD believes that the relaxation of loan policy for the SCBs will facilitate the private sector exporters to gain competitive advantages, ensure environmental compliance, and be sustainable. According to Bangladesh Bank, USD 89.69 million has been disbursed from GTF so far. BUILD hopes that the loan policy relaxation for SCBs will expedite more loan disbursement in the near future.

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Business Initiative Leading Development (BUILD) and International Finance Corporation (IFC), World Bank Group under BICF II funded by the Foreign, Commonwealth & Development Office (FCDO), organised a virtual workshop on Step by Step Export Trade Procedures and Online applications of getting better services for Dinajpur Women Chamber of Commerce and Industries (DWCCI). The key objective of the virtual workshop was to aware the women entrepreneurs on how to enter into the export trade. High officials from the Export Promotion Bureau (EPB), Custom House, Dhaka East, and private sector officials of the trade-related agencies participated in the workshop, which was organised on 22 August 2021.

Ms Ferdaus Ara Begum, CEO, Business Initiative Leading Development (BUILD), welcomed all the participants. She thanked DWCCI for their eagerness to respond first to have programs to raise awareness of their members on the trade procedures. She said that the country’s economy, amounting to 350 billion USD, is highly dependent on export. It is necessary to increase export revenue to create more employment. Bangladesh is maintaining its export target comparing to other countries amid the COVID-19 pandemic. Trade-related procedures are embracing online platforms day by day in the country. The women entrepreneurs must be aware of the trade-related procedures where increasingly IT solutions are introduced to make it instant and simple. Dinajpur has a high concentration on exportable agricultural products, poultry, handicrafts, fashion wear etc. and WoB are coming up in several new ventures, which is a good sign.

Kanis Fatama, Senior Research Associate and Shahriar Rawshon, Research Associate, BUILD jointly presented the keynote titled Women-Owned Entrepreneurs (WOE) on Export Trade. In reference to IFC (2016) data, the women-owned businesses (WOB) constitute six lac out of the 8 million businesses in Bangladesh. It is hoped that the full functioning of the Economic Zone at Dinajpur will make a vibrant contribution to the local economy. The presentation covered detailed step by step export procedures, time and costs engaged in getting permission, certificate, approvals etc. in areas of trade license, membership from the local chamber, online licensing module, export registration certificate, export permit, bank account opening, TIN certificate, VAT registration, customs procedure as well as incentives announced by the government to encourage export.

Exporters are awarded Cash Incentives, Bonded Warehouse Facility and Duty Exemption & Duty drawbacks upon their export earnings to ensure their export competitiveness in the export market. In the end, detailed case studies on (1) export of fresh vegetables from Bangladesh to the Middle East and (2) export of jute goods from Bangladesh to the EU were presented to provide an accurate and practical scenario of the export procedure from Bangladesh.

In the open session, moderated by CEO, BUILD, a number of WOB participated; Ms Shadia Khanom, Member, DWCCI, said that she is doing online business in the handicrafts sector. She hoped to expand her business depending on customers’ demand; she has her Facebook ID and posts her goods on her page to attract customers.

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Business Initiative Leading Development (BUILD) is deeply saddened by the passing away of Alhaj Anwar Hossain, (Inna Lillahi Wa Inna Ilayhi Raji’un), Founder Chairman of Anwar Group of Industries, Former Member of Parliament (MP), a renowned industrialist and business icon of the country. He was a great gift to the Bangladesh private sector and a role model for all of us. The country will undoubtedly remember him as a great innovator and rare entrepreneur who made remarkable contributions to the country’s economy.

Chairperson, Trustee Board Members, Management and Staff of BUILD deeply mourn and express deep shock and sorrow to the family of Mr Hossain. His sincere contribution to the nation will always be remembered with great admiration and gratitude.

We recall with respect his contribution to trade and commerce, employment generation, industrialization, entrepreneurship and social development will always be remembered and cherished. He was instrumental in the development of business, trade and economy of the country. His dedication and commitment to the development of the private sector were truly inspirational and unique. May his institutional legacy last forever.

We convey our sincere condolences to the family members. We pray to Almighty Allah to grant him peace and give strength to the family to overcome this irreparable loss. Ameen.

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The government of Bangladesh is committed to implementing high-impact regulatory reforms such as streamlining the existing company registration process and reduce administrative costs in the procedures, said Mr Tipu Munshi, MP, Hon’ble Minister of Commerce. He presided over a webinar on “Streamlining Company Registration Process in Bangladesh” as Chief Guest on Sunday. The meeting was organised by Business Initiative Leading Development (BUILD) in collaboration with The Feed the Future Bangladesh, supported by USAID.

The Commerce Minister cited the examples of Singapore and Malaysia that have shown remarkable success in simplifying the company registration process, reducing the time to register a company to less than one hour. Bangladesh’s Registrar of Joint Stock Companies and Firms (RJSC) has undergone several reforms and digitalised the registration process. However, still, there is room for improvement for which collaboration of both the public and private sectors is required.

Mr Abul Kasem Khan, Chairperson, BUILD, commenced the program by thanking the Commerce Minister for taking the lead in modernising the company act. RJSC has digitised the registration process along with other services. He mentioned that BUILD is presenting a survey conducted jointly with The Feed the Future Bangladesh containing recommendations to reduce the time and costs in the company registration process.

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SME & Special Programmes, Department of Bangladesh Bank (BB) has issued a circular on 3 August 2021 (SMESPD Circular Letter No. 09/2021), which instructed the refinancing interest/profit rate to be fixed at 0.5% (zero point five per cent) at bank/financial institution level and maximum 5% (five per cent) at the customer level, previously which was 3% and 7% respectively as per SMESPD Circular Letter No 02/2020.

As per the instructions of paragraph 3 of SMESPD Circular No. 2/2019, net loan of CMSME sector at the end of 2024 and a minimum distribution target of 15% (fifteen per cent) of the advance status is set for women entrepreneurs(WE) for refinancing facility on priority basis under the “Small Enterprise Refinancing Scheme”.

Through its SME Development Working Committee, BUILD recommended that Bangladesh Bank take the initiative to ensure a separate refinancing scheme for WE to enable them to avail more credit facilities and a dedicated desk for WE in Banks and NBFls to get prompt services.

The circular would definitely support WE, those who are multiple loan consumers; for them, other than interest rates, timely loans and simple conditionalities are much more important. It is seen that Banks are required about 24 types of documents in the form of company documents, personal documents and business guarantor documents which becomes very difficult for submitting for small business entrepreneurs.

Simplification in this respect is also significant. Rural women entrepreneurs are precarious, suffering from the fund and cannot afford collateral; even though BB has announced several other alternatives such as educational certificates, chamber/association certificates, but Banks and FI are primarily dependent on Collateral-based loans. Nowadays, in rural areas, many returnee migrants at the local level who have just lost their jobs, suffering a severe financial crisis, need collateral-free finance even if the amount is minimal for their sustenance.

As the CMSME package has already been announced at 4% from the client, so this announcement for 5% might encourage women entrepreneurs. Still, for their benefit, loan conditionalities and time-bound loan support would be much more beneficial.

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For the first time, the yearly Monetary Policy Statement (MPS) has been announced electronically for FY 2021-22, an expansionary and accommodative policy with some specific steps to mitigate the damage done in the economy by the COVID-19. Considering the COVID situation and lack of assertiveness of investment businesses, MPS targeted private sector credit growth at 11% and 14.8% for the first and second half of FY 2022, while the public sector credit growth target is 30.6% and 32.6%, respectively. Due to COVID, there has already been a significant negative impact on employment. Lower interest in credit growth in the private sector could further impact the country’s employment situation.

A significant share of the micro, cottage and small entrepreneurs are informal businesses that are suffering because of the small amount of monetary support. Bangladesh Bank’s policies to support these segments need to be more comprehensive.

The country needs to promote investment and ensure maximum utilization of the existing SPs as well as the Credit Guarantee Schemes for the immediate rescue of CMSMEs. The government may announce a specific 2nd round of SPs with an allowance for new employment as well as retention of employment for encouraging investors. While there is a huge amount of liquidity in the Banks, there could be a good use of this liquidity in the areas so that the velocity of money increases.

The trade balance shows an adverse trend as it has been widened around USD 3.2bn than the previous fiscal year. This is alarming as, over the last five months, imports remained stuck due to market shock. It should concentrate on policy support to service export which may help to keep the trade balance favourable.

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4IR & ICT is a reality now. Bangladesh needs to prepare for this. The strategy prepared by the government in this respect may be strengthened further by the inputs from the private sector. BUILD prepared a concept note to identify some gaps in comparison with similarly placed countries and identified some areas on which Bangladesh needs to emphasise. In this respect, a presentation was made to gather some more ideas in the 2nd meeting of 4IR and the ICT working committee of BUILD. Concerned government and private sector representatives were present. The meeting was co-chaired by Mr Bikarna Kumar Ghosh, Managing Director, Bangladesh Hi-Tech Park Authority (HTPA), and Mr Syed Almas Kabir, President, Bangladesh Association of Software and Information Services (BASIS). Mr A K Khan, Chairperson, BUILD, Dr Mohammad Alamgir, Member, UGC, among others, were present.

Mr Bikarna Kumar Ghosh, Managing Director, Bangladesh Hi-Tech Park Authority, thanked BUILD for organising the 2nd meeting of the 4IR&ICT Working Committee as well as for presenting an informative keynote presentation. He focused on the harmonised collaboration between the relevant stakeholders of the public and private sector to ensure sustainable growth of the 4IR&ICT industry in Bangladesh. He assured that while the government has taken a number of initiatives and implemented policy measures in that respect, the door is always open for the private sector to come up with innovative and justified recommendations. He added that all the inputs, recommendations, and expert opinions gathered from this session will be well taken and addressed in the further report by BUILD.

Mr Syed Almas Kabir, President, BASIS, shared his observation on data privacy guidelines, stressing the urgency of its implementation. Proper data privacy is required to enhance Big Data expansion. IOT issue needs to be addressed as a priority agenda under the Digital Security Policy. Expansion of 5G internet is a critical need for eventually developing the IoT and 4IR technologies. Up-skilling and re-skilling of workers is essential to ensure that there is minimum disruption in the labour market as automation through industrial robotics technology is coming fast. It is high time to collaborate with the international robotics industry to the domestic industry.

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Business Initiative Leading Development (BUILD) conducted a study on COVID Stimulus and Links to Employment, Consumption, and Investment: The Bangladesh Experience, Global Lessons, and Priorities for Next Round Support that aims to assess the effect on Bangladesh economy in the immediate aftermath of COVID-19 understand the stimulus and its key features, understanding the economic recovery post-covid stimulus, focusing on consumer demand, employment and private investments, comparative analysis of measures taken in select countries, derive key-takeaways and key recommendations for a quick and inclusive turnaround of the economy.

BUILD conducted a rapid survey (Feb 2021), which was a part of the study, and found that the sales of SME firms have been negatively impacted due to the pandemic. In addition, several firms reported a depressed demand compared to the pre-COVID scenario, indicating that consumption and demand have not recovered fully.

These major findings were revealed at the webinar titled COVID Stimulus and Links to Employment, Consumption, and Investment: The Bangladesh Experience, Global Lessons, and Priorities for Next Round Support on Thursday, 24 June 2021. The event was organized virtually by BUILD as part of supporting the government for redesigning a second-round stimulus package for inclusive economic recovery.

Having joined the webinar as the Chief Guest, M. A. Mannan, Minister for Planning, said that the country’s economy has been growing gradually because of millions of small investment drops. Referring to the recent UNCTAD report of 2021, he said the government is always welcoming greenfield FDI in Bangladesh considering the quality of investment. Responding to the points raised by the discussants, he said the National Budget for FY 2021-22 has focused on the continued economic recovery amid the pandemic. The government will consider the demand of the bottom line of the society if a second stimulus package is formulated where importance will be given to activate more SME supportive organization. Best practices from different developed countries should be considered to make the overall economic ecosystem of Bangladesh vibrant. He also appreciated the role of the central bank’s role in disbursing the stimulus package of the CMSME.

During the welcome note, Abul Kasem Khan, Chairperson, BUILD, said that the initiative and leadership of our Honorable Prime Minister to combat the COVID-19 gave confidence to the economy. However, unemployment, demand generation, and savings need to be addressed to make the initiative more fruitful.

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