Title : Bangladesh Industry sector benefited by SMEs market. MD. Shahnewaz Shohan1 Email:mdshohan44@yahoo.com.

Introduction: The elaboration of SME is small and medium-sized enterprise. The Least Developed Countries (LDCs) in the east have started refocusing their attention on SMEs to enhance their role in bringing about structural changes in their economies. For Bangladesh SMEs have assumed special significance for poverty reduction programs and potential contribution to the overall industrial and economic growth through SMEs internationalization process. And gradually there emerges more importance of the SME financing in our country. Objectives of the Study: The objectives of this study are as follows: 1. To identify whether SME financing plays any role in changing the occupation of the beneficiaries. 2. 3. To detect whether SME financing plays any role in employment status of the beneficiaries. To identify whether it plays any role on the labour force participation rate of the beneficiary households. 4. To assess whether it plays any role in enhancing the working hours of the beneficiaries.

Research question:
1. How does SME financing play any role in changing the occupation of the beneficiaries? 2. Does SME financing play any role in employment status of the beneficiaries? Methodology of the Study: This study necessitates applying empirical and statistical aid to analyses impact of SME financing on occupation and employment. Empirical and statistical methods are used to strengthen the evidential pillar of the study which helps enabling readers to believe the facts. In this regard, both primary and secondary data would be used. Review of Literature SME sector has played a vital role in economic development of some prosperous countries of Asia. Our neighboring countries have also given due importance on SME. Terming SME as employment generating machine they stressed on SME development for higher economic growth, narrowing the gap of income inequality and poverty alleviation. The present government has also put much emphasis on the development of SME sector considering it as the driving force for industrialization.
1

Masters Research Student, Dept. of Economics

Faraha Nawaz (2009) conducted a study entitled Small Medium Enterprise (SME) Program of BRAC Bank: Its Impact on Poverty Alleviation Among Poor Women in Bangladesh. The purpose of writing this paper is to examine the impact of SME program of BRAC Bank on poverty alleviation of poor women in Bangladesh. What is the main focus of SME program and what the SME can do for the development of Bangladesh? Does SME program of BRAC Bank bring any positive changes in life of poor women in terms of income level, savings, investment, education, housing etc that ultimately alleviate poverty in Bangladesh? Does SME program truly work for the alleviation of poverty among poor women? This paper seeks to answer all these questions. Both primary and secondary data have been used in this study. The major findings of the study are- the poor women brought significant changes in their life in terms of income, savings investment, purchasing power etc after getting SME loan. This paper also analyzes the major constraints that BRAC Bank faces in accelerating this program. Uddin (2008) has stated that the economic efficiency and overall performance of the SMEs especially in the developing countries are considerably dependent upon macroeconomic policy environment and specific promotion policies pursued for their benefit. Chowdhury (2007) highlighted that in context of Bangladesh SME is characterized by Low capitalization and limited assets, geographical diversity and high mortality, poor credit knowledge, very limited access to formal source of credit, cash intensity in transactions, very limited record keeping habit, poor financial disclosure on account of tax issues, high risk perception has led to high borrowing costs. Md. Shamsul Alam and Md. Anwar Ullah (2006) conducted a study entitled SMEs in Bangladesh and Their Financing: An Analysis and Some Recommendations indicating that small and Medium Enterprises (SMEs) are accounting for 25 percent of GDP, 80 percent of industrial jobs, and 25 percent of the total labour force in Bangladesh even though the prospective sector gets negligible facilitation from different support service providers. There are various constraints that hinder the development of SMEs in Bangladesh, such as lack of medium to long-term credit, limited access to market opportunities, technology, and expertise and business information. Lack of suitable incentives, inefficient and limited services from relevant government agencies as well as poor capacity of entrepreneurs are other reasons for the slow growth of SMEs. Obviously, the government has many things to do to flourish the SMEs because, if they flourish, SMEs will create new entrepreneurs, generate more jobs and contribute to a great extent to the national economy. This paper is an academic analysis toward policy formulation in respect of SME financing. Ahmed (2006) observed that availability of finance is a major constraint to formation and growth of SMEs in Bangladesh. Banks are reluctant to expand their SME credit portfolio because they do not

consider SME lending an attractive and profitable undertaking. This is so because SMEs are regarded as high risk borrowers because of their low capitalization, insufficient assets and their inability to comply with collateral requirements of the banks. Administrative costs are also higher because close monitoring and supervision the SME operation becomes necessary. The Daily Star in its editorial (2006) mentioned that many SME owners are to face difficulties when they require bank loans. In fact, SME financing has recently been identified by experts as one of the major problems faced by SMEs in Bangladesh.

Significance of this Study: In Bangladesh the SME sector is contributing more than 25% of
the total GDP. So the economic escalation and poverty alleviation of this country becomes the opposite side of a coin with SMEs development. With this potentiality if we consider the trade liberalization or internationalization then this sector becomes very lucrative for generating m u c h m o r e profit to the successful entrepreneur s. With this great opportunity f o r internationalization the situation will be very competitive and challenging for the owners of SMEs to survive in the market in the battle of price war, product offering, and product quality. And the situation requires the more availability of SMEs financing in the economy. Many people are study in SMEs industry; they are given much theory I would like to given a special theme for this sector in Bangladesh. The most urgent and important task for the Bangladesh SME industry is shortening the lead time; The best option for Bangladesh is to improve its deep-level competitiveness by reducing total production and distribution time, which will improve surface-level competitiveness by reducing lead time. An important precondition for implementing that strategy is the existence of a strong domestic SME industry. Bangladesh faces significant constraints in this regard and hence it is not possible to establish strong backward linkages overnight. Therefore, to retain competitiveness in the national and international market, Bangladesh has to think of other alternatives. Thats why I am interested to research on this topic. Innovation: In a study about SME sector of Bangladesh Miah (2007) stated that the major constraints for SMEs are lack of adequate investment, lack of modern technology, high rate of interest on bank loans, irregular/inadequate supply of power, poor physical infrastructure and high transportation cost, poor information about market opportunities and requirements, inadequate availability of raw materials, lack of skilled technicians and workers, lack of research & development facilities, fierce competition, absence of effective and transparent legal system, difficulties in accessing technology, credit constraints, low access to business services, constraint of quality of human resources, low awareness, low lobbying capacity, rapid changes in policy environment.

Conclusion: The World Bank, Financial and Private Sector Development and Consultative Group to
Assist the Poor (January, 2011) under Policy Research Working Paper held out a report entitled Small and Medium Enterprises: A Cross-Country Analysis with a New Data Set. In the aftermath of the global financial crisis of 20082009, there has been an increased interest in the role of small and medium enterprises in job creation and economic growth. However the lack of consistent indicators at the country level restricts extensive cross-country analyses of lending to small and medium enterprises. This paper introduces a new dataset to fill this gap in the small and medium enterprise data landscape. In addition, it provides the first set of results of analyses with this new dataset, predicting the global small and medium

enterprise lending volume to be $10 trillion. The bulk of this volume, 70 percent, is in high-income countries. On average, small and medium enterprise loans constitute 13 percent of gross domestic product in developed countries and 3 percent in developing countries. Note that although a unique small and medium enterprise definition does not exist, differences in definitions across countries are not statistically significant in explaining the differences in small and medium enterprise lending volumes. Bibliography: 1. Islam Tasmin, Competitiveness, Challenges and Prospects of SMEs in Bangladesh forInternationalization, Khulna University, 2008. 2. S. Alam, A Ullah, SMEs in Bangladesh and Their Financing: An Analysis and Some Recommendations, Dhaka, 2006. 3. Hossain Nazmul, Constraints to SME Development in Bangladesh, Dhaka, 1998.