Dhaka: Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir emphasized the critical role of the cottage, micro, small, and medium enterprise (CMSME) sector in driving the country's economic progress. Addressing a focus group discussion titled 'Synergising the Banking Sector: Lenders and Borrowers' Perspective,' organized by the Dhaka Chamber of Commerce and Industry (DCCI), Titumir highlighted the importance of creating a robust and inclusive financing ecosystem to bolster CMSME growth.
According to United News of Bangladesh, Titumir called for enhanced collaboration between the government and the private sector to propel the CMSME sector forward. He noted the necessity of reforming the Bank Company Act and other financial laws to establish a coordinated economic framework. Titumir also underscored the need for sustainable financing by strengthening bond and capital markets as alternative funding sources alongside traditional banking channels.
The adviser reiterated the government's commitment to supporting labor-intensive industries to increase employment, mentioning plans to revive closed state-owned factories, boost industrial production, and promote women entrepreneurship. He acknowledged existing vulnerabilities in the financial sector, stating that policy measures and structural reforms are underway to ensure recovery and stability.
Bangladesh Association of Banks (BAB) Chairman Abdul Hai Sarker emphasized the importance of simplifying SME financing, highlighting the proactive role of private banks in supporting the sector. He identified a lack of coordination between policymakers and stakeholders as a significant challenge.
Naushad Mostafa, Director of the SME and Special Programs Department, pointed out the absence of reliable data as a major obstacle to effective decision-making. He stressed the need for improved AI-based connectivity between financial institutions and government agencies.
Selim Al Mamun, Director (Research) of the central bank, noted that despite excess liquidity, the private sector lacks dynamism due to macroeconomic instability. He advocated for improving the ease of doing business to restore investor confidence and mentioned ongoing efforts to reduce inflation to around 7 percent.
Md Abdul Wahab, another Director (Research) at Bangladesh Bank, encouraged businesses to explore bond markets and other financial instruments rather than relying solely on banks. NCC Bank Managing Director M Shamsul Arefin highlighted the increasing focus on green and eco-friendly projects and the challenges posed by inadequate documentation among CMSME entrepreneurs in accessing bank credit.
Ashanur Rahman, Deputy Managing Director of City Bank, discussed the impending implementation of IFRS 9, which will tighten loan provisioning practices. He urged the central bank to expand the Credit Guarantee Scheme and simplify loan documentation to unlock the potential of CMSMEs. He also stressed the necessity of a dedicated marketplace for CMSME products, warning that without proper market access, entrepreneurs may find it difficult to sustain operations, impacting banks' loan recovery.
DCCI President Taskeen Ahmed presented the keynote paper at the discussion, which saw participation from business leaders, entrepreneurs, and representatives from both public and private sectors.