SME Foundation Director Monwara Hakim Ali chairs a discussion at SME Foundation auditorium in Dhaka Tuesday.

Local and foreign participants at a discussion Tuesday identified high bank interest rate as a big challenge for the growth of the Small and Medium Enterprises (SMEs) in Bangladesh.

They also found low skills of both entrepreneurs and employees, and absence of proper technological support as other challenges for the sector.

The SME Foundation organised the roundtable styled: ‘Challenges and Opportunities of SMEs in Bangladesh’ at its auditorium in Dhaka in support with Brac Business School and the University of Oklahoma, USA. Participants say bank loan rates for SMEs are higher compared to big companies.

“Private commercial banks often charge 17 percent and more as interest for SMEs, which is at least two percent lower for big corporate houses,” said Syed Shoaib Hasan, a local entrepreneur.

Speaking at the discussion, Jeff Moore, Executive Director of Oklahoma-based Center for Creation of Economic Wealth, said access to finance at a justified rate of interest is indispensable for the growth of SMEs as the sector entails employment and production of a country.

“The high rate of interest, as I came to know here, is really a big issue and it must be addressed with policy initiatives,” Jeff told the discussion.

Commenting on the issue, SME Foundation Managing Director Syed Rezwanul Islam said though high interest is a big challenge for the SME sector, it’s up to a bank’s own policy to facilitate SMEs.

“Yes, it (high rate of interest) has become a big challenge for SMEs. But, we are constantly pursuing the central bank and management of the banks for a logical rate that could help grow this sector,” he said.

He said the role of the SME Foundation is to address the ‘missing-middles’ so that entrepreneurs could enhance their capacity broadly to contribute to the economy.

Director of BRAC Business School, Mamun Rashid, said Bangladesh has immense potential to expand the SME sector by just providing training facility and creating space for entrepreneurs to get adequate finance.

He said entrepreneurs have no capability to prepare a bankable proposal to get loans. “Entrepreneurs must improve themselves by getting trained to learn how to write a good proposal and operate business efficiently,” he said.

The Daily Sun/Bangladesh/ 20th June 2012