Vocational training, startups funds needed with more attention to women entrepreneurs, say experts.
DHAKA, Bangladesh (AA) – Securing a job has become almost a dream since the coronavirus pandemic hit Bangladesh as most job providers in the government and private sector have closed their recruitment process.
About 2 million youngsters enter the job market every year in Bangladesh. A World Bank report indicates that the country’s employment rate is less than 50% across all three streams of polytechnics, universities and colleges.
Mukit Mahbub, 29, was among the millions. But he changed his fate from nothing to a small business owner.
His struggle started soon after he moved to the capital, Dhaka, following his post-graduation from a national college from the northern Rangpur district three years ago.
He had a job at a private organization with a salary of Taka 20,000 ($236) per month in late 2018 but it was hardly satisfying.
He had to return to his town soon after the pandemic hit the country, and the economy. He started a small business in 2020 taking money from a local NGO and short training from a local vocation institute.
Now his business employs about one dozen youths and is worth Taka 4 million ($47,203). One of his friends, Salauddin Shah, who received an MBA degree from a university in Dhaka, joined him in the venture.
But like many others, he could not get a loan from banks that is designed for small and medium-sized enterprises (SMEs).
Mukit’s tale is not isolated as thousands have started new enterprises since the pandemic.
But a number of challenges are creating obstacles while forcing many to be left empty-handed.
SME contribution to GDP is about 25% and 40% of the employment is in the sector. The Bangladesh Bureau of Statistics said there are about 7.8 million SMEs that employ 24.5 million people.
Experts for extending stimulus, training
Mirza Nurul Ghani Shovon, president of the National Association of Small Cottage Industries of Bangladesh told Anadolu Agency that young people need technical and vocational training on a large scale.
“We now need some technological support, continuous training, certainly on vocational and technical, health safety and labor safety awareness, ensuring decent work in business and factories and reducing vat exemption in SMEs in order to boost the sector,” he said. “The government and conventional private sector could not house all the increasing number of unemployed youths certainly after the pandemic. Therefore, authorities should entertain new startups.”
Bangladesh has about 10 million SMEs while 50% were affected or closed during the pandemic, he said. The government, however, announced a stimulus but it is not sufficient for the need.
Meanwhile, women entrepreneurs have allegedly faced more challenges.
Women constitute about 10% of total entrepreneurs in Bangladesh while only 36% participate in the labor market.
A stimulus package of taka 200 billion ($2.3 billion) for the Cottage, micro, small, and medium-sized enterprises, or CMSME sector, carries 5% reservation for women businesses.
But insiders claim they are being deprived of availing loans and stimulus from banks and the government because of system difficulties from other ends.
Dr. Nadia Binte Amin, President of Women Entrepreneurs Network for Development Association told Anadolu Agency that the “pandemic caused unemployment for many while many others started new enterprises after being jobless due to the pandemic. But, we are not getting necessary cooperation as long as we apply for SMEs loans.”
“None of 750 members of my association has managed to avail any of the government announced stimulus. We need that stimulus through mobile financing, not through banks. And, a woman-friendly comprehensive policy to address those challenges,” she added.
Dr. Md. Mafizur Rahman, Managing Director of Government SME Foundation, admitted that the loans and stimulus for the sector is insufficient.
“We do offer banks loans with comparatively low-interest rates [9%]. We have already disbursed taka 1 billion [$11.8 million] by June this year while more taka 2 billion [$23.6 million] will be disbursed very soon to support the pandemic-hit enterprises. We have limited funds to offer but we are mainly designed to ensure loans from the commercial banks,” he said.
Rahman acknowledged that the country needs about taka 30 billion to 35 billion ($354 million to $413 million) to address the demand.
He motivates and inspires young people and new graduates to new enterprises and said the government has arranged online and physical training, digital design and marketing training for those who want to come to the SME sector.
“The pandemic hit the country and the economy hard. But, simultaneously, the situation has offered new opportunities in many sectors including digital designing, photography, digital and online marketing, health and so on. And so many youths proved it,” he said.
He said the government is planning to introduce a separate package for innovative startups and enterprises because many young graduates are too old at 30 for government jobs because of the pandemic, he added.