FROM PAGE B1

Loan disbursement data from Bangladesh Bank also reflects the financial struggles of small ventures.

Loan disbursement to small enterprises dropped by 16.05 percent year-on-year in the July-September period of fiscal year 2024-25, compared with a 1.89 percent increase in the same period of FY24, according to central bank data.

Meanwhile, the cost of financing for SMEs surged to 12.12 percent in December 2024 from just 6.17 percent in June 2023, further straining businesses.

UNEXPOSED TO LOANS, YET STRUGGLING

In contrast to Malo and Ullah, Rubina Akter Munni, owner of Design By Rubina, does not have any bank loans.

She manufactures leather goods such as travel bags and jackets.

She said online, corporate, and export orders have almost disappeared over the past three months.

“Consumers are probably not spending on luxury products,” she added.

“Earlier, I received export orders from expatriates and local leather exporters, but they are delaying payments due to their own business downturns,” she said.

With revenue sharply down, she is struggling to pay her 71 employees. “This tough situation affects not just me but many small entrepreneurs,” she added.

Some businesses have already postponed orders.

Although she finds relief in having no bank loans, running day-to-day operations is becoming increasingly difficult.

A SILVER LINING IN GOLDEN FIBRE

Ajit Kumar Das, owner of Creative Jute Textile in Narsingdi, has managed to sustain his business thanks to the steady demand for eco-friendly bags made of jute -- dubbed the “golden fibre” of Bangladesh.

While other businesses struggle, his company supplies various shops in tourist areas, and some of his bags are indirectly exported abroad.

“Basic Bank has supported me financially, and even private banks have shown interest in providing loans. As long as I maintain quality and attractive designs, there will always be demand,” Das said.

His company currently employs more than 100 workers and remains one of the few thriving SMEs.

SME FOUNDATION FOR LOAN DEFERMENT

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, cited the Purchasing Managers’ Index (PMI), which signalled a downturn in the SME sector.

He identified three main challenges: high production costs driven by inflation, disruptions to raw material imports due to the US dollar crisis, and declining consumer demand as the cost of living rises.

Anwar Hossain Chowdhury, managing director of the SME Foundation, acknowledged these challenges and emphasised that SMEs often operate with limited capital, making them vulnerable.

The foundation has urged Bangladesh Bank to grant a three-month loan deferment for SMEs.

“We are also working to create collaboration among stakeholders through fairs and conferences,” he said.

“Our goal is to ease access to bank loans by connecting the banking sector, corporates, and entrepreneurs, ensuring their progress.”