Tanzila Mustary and Tarikul Islam on the basis of a survey findings
Small and medium enterprises (SME) in Bangladesh trace their history long into the past. Since the middle ages Bengal was rich in various small and cottage industries as well as trade and commerce. After the independence of Bangladesh in 1971, different governments brought changes in trade and industrial policies. At present, SME sector has become an important sector for the economy of Bangladesh. Around 25 per cent employment is created by this sector. Currently, the wave of SME has touched upon the rural economy and SME is emerging as a potential sector in rural Bangladesh.
SMEs are particularly suitable for densely populated countries like Bangladesh where the sector can provide employment with a much lower level of investment. They have now been considered as the thrust sector in the countrys economic development with their growing importance in the cross-sections of rural life. In a developing country like Bangladesh where about 75 per cent people live in rural areas, the role of the SMEs cannot be overemphasised in terms of both income generation and employment.
In an attempt to learn about the importance of the SME in the rural economy of Bangladesh as well as the contribution of public banking in the expansion of its base, a total of 40 persons irrespective of caste, profession, religion, gender and political affiliations were interviewed from different unions of Gafarogan upazila of Mymensingh district. Findings of the interview are as follows:
Figure-I: Scope of expansion of SME in Rural Bangladesh
From the pie chart, it can be seen that out of the total number of respondents 90 per cent are of the opinion that SME is the potential sector having scope for expansion in the rural area while only 10 per cent opined that, due to absence of electrification as well as proper infrastructure in the rural Bangladesh, SME has limited scope for expansion.
Figure-II: SME contributes towards economic emancipation of the rural community
From the pie chart; it can be seen that, 100 per cent are of the opinion that SME will contribute to emancipating rural economy of the country.
Figure-III: Credit from Public Bank for setting up SME is helpful.
From the pie chart it can be seen that out of total number of respondents 90 per cent are of the opinion that credit from public banks is beneficial for the expansion of the SMEs while the remaining10 per cent viewed that public bank is not helpful for establishment of SME in rural areas due to the drawn-out process of banks for releasing credit.
Figure-IV: Public Bank contributions is necessary for promotion of SMEs in Rural Bangladesh
From the pie chart it can be seen that out 80 per cent of the respondants are of the opinion that SME would be greatly benefited from public bank while 20 per cent opined negatively.
Figure-V: SME helps solving joblessness in the rural Bangladesh.
From the pie chart it can be seen that 100 per cent of the respondents strongly opined in favour of SMEs in rural areas as this sector will certainly help solve unemployment.
Based on findings of the brief survey it can be suggested that public bank should come forward to encourage the rural investors to set up SMEs. Furthermore, SME in many cases can be set up at domestic and household level and family members may also participate in the process.
The writers are respectably an officer of Sonali Bank Ltd and a PhD Researcher, Jahangirnagar University. Views expressed do not necessarily represent those of Sonali Bank Ltd. email@example.com