If Bangladesh wants to attain steady growth in its SME sectors, it should urgently introduce a new financial service like factoring, writes M. Zakir Hossain.
Bangladesh’s small- and medium-sized enterprises (SMEs) are always facing a crisis of short- and long-term financial facilities to run their business operation. Although there is propaganda among some private bankers that they finance SMEs as and when they need it, in reality, it happens only for the 'solvent and upper' class SMEs. No sizable financing facilities have been offered so far to the bottom level SMEs in Bangladesh, who are striving hard with their limited resources. Sources of finance are there but they demand strong and solid collateral security without which finance facilities cannot be enjoyed.