In recent times, a paradigm shift in young mindset has been observed. A radiant, self-driven and energetic post-Liberation generation is rising in Bangladesh. Young talents, breaking the old mind-set, are now pursuing careers based on understanding market trends, passion and development prospects. Bangladesh is firmly en route to become a middle-income country as its youth population is vigorous, hardworking and entrepreneurial and the youth has the potential to contribute to creating a better Bangladesh and building a knowledge society.
Context and Background: Where We Stand
Bangladesh is a country with a youth population of 55 percent and a middle course population larger than the total population of each of the nation like Malaysia, Singapore or Thailand. Every year nearly 2 million people are entering into the labor force while only 1 million get employed in domestic and overseas job markets (source: Bangladesh Bank). A recent inventory by BSCIC/Ministry of Industries indicates that up to June 2010, there were 0.77 hundred thousand small industries and 6.30 hundred thousand cottage industries in Bangladesh. About 70 percent of these enterprises are run by the youth entrepreneurs. Among them youth entrepreneurs in urban areas have good financial stand, while 80 percent of youth entrepreneurs in rural areas are underprivileged.
National policies have emphasized on self-employment to provide opportunities for part of the new entrants in the labor force. To spur the economic growth through innovation and entrepreneurship the Government is putting special emphasis on new enterprise creation, women entrepreneurship and enhancing access to formal financial system for the cottage, micro and small enterprises.
Important Policy Measures taken for Entrepreneurship development
Bangladesh contains one third of its population between the ages of 18-35 (numbering 60 million by 2020); without their entrepreneurial efforts it is not possible to achieve sustainable growth. Bearing the fact in mind the government of the country, presently, intends to build up a supportive ecosystem for the youth to facilitate the tools and atmosphere to succeed.
Loan and Refinancing
Bangladesh Bank has recently announced the introduction of a refinance scheme worth Tk 1 billion to boost the entrepreneur development project initiated by Dhaka Chamber of Commerce and Industry. Under the entrepreneur development project, the DCCI has already started to create 2,000 new entrepreneurs to strengthen the country’s small and medium enterprises sector. The new entrepreneurs will be able to get loans with a lower rate of interest from the refinance fund to launch their new business ventures.
SME Foundation organizes training program in public-private partnership module to enhance the skill of SME entrepreneurs as well as to create new entrepreneurs. The foundation also has taken ‘credit wholesaling program’ as pilot scheme with its own fund. SME Foundation helps the SME entrepreneurs by providing collateral free loan at 9% interest rate to the technology based potential SME manufacturing industries along with agro-based industries.
For the first time in Bangladesh, an indicative target for SME loan disbursement has been set for 2010 by the banks and financial institutions considering SME development as one of the most important development agenda of the country. For small entrepreneurs credit limit will be ranged from Tk. 50,000 (Fifty thousand) to Tk. 50,00000 (5 million).
Since the inception of the institute till June 2013, SCITI has imparted training to about 40,000 persons. The Institute carries out its training and research activities through the following six faculties: Entrepreneurship Development, Industrial Management, Financial Management, Marketing Management, General Management, Research and Consultancy.
Inspiring Women Entrepreneurship
To encourage women entrepreneurs to enter into the business arena SMEF has been giving National SME Women Entrepreneurship Award for the last several years. Opening of women entrepreneurs dedicated desk/ SME help desk in each Bank and NBFI is a remarkable step by the authority to prioritize women entrepreneurship. Allocation of 15% refinance fund for women entrepreneurs, facilitate loan up to BDT 2.5 million to women entrepreneurs against personal guarantee and without collateral are some other exemplary strides made the Government to promote women entrepreneurship.
Challenges towards Start-ups
In Bangladesh, we have high net worth people with different expertise. The vast pool of young generation with creative ideas can make a dent to create values. Due to lack of knowledge-based innovative undertakings we are failing to make them interactive. Here business start-up process is time consuming, cumbersome and complex, because of several bureaucratic tangles and technical glitches in starting a new venture. Business entrepreneurs face inexplicable delay and feel discouraged.
Strategic Partnership is another common problem for a startup company. Due to absence of favourable policy and instruments, we mostly confine our products to the local market. To attain inclusive growth and global market access some of the big companies, along with the Government, should come forward and provide assistance to the new entrepreneurs.
Recent Policy Considerations to Clear Impediments
For the overall development and youth entrepreneurship of the country, the Government of the People’s Republic of Bangladesh has set the following strategies:
♦ Increase women’s participation in the decision making process of all financial institutions and remove the existing discrimination
♦ Formulating and implementing special economic policy for youth (commercial policy, monetary policy and fiscal policy, etc
♦ Consider the initiatives of youth while formulating the macro-economic policies and taking programs for Enterprise Start-ups;
♦ Government has set distinct strategies in its National Action Plan (NAP) for the development of the youth entrepreneurship;
♦ Adoption of a comprehensive sustainable industrial policy that will promote equity for youth
♦ Upgrade technical “know-how” of youth and develop technology suitable for young entrepreneurs
♦ Enable MOI and other related ministries, agencies to address and implement WID issues in comprehensive and coordinated way for effective implementation of the Industrial Policy and support research, evaluation and action-oriented programs of industry particularly for youth engaged in the industrial sector.
♦ Setting up special window for financing youth entrepreneurs and Pre- and post investment counseling for youth entrepreneurs for credituted, with requisite resources and mandate to match.
– National Industrial Policy 2010 (Draft)
– National SME Strategies 2005
– Handbook of Entrepreneurship Development, DCCI, 2013
– BRAC Report on Beyond Skills, 2012
– Official Website of Bangladesh Bank
– Official Website of Ministry of Commerce
– Official Website of SME foundation
– Official Website of SCITI