ASIAN CONFERENCE ON ENTREPRENEURSHIP (ACE 2018)

Transcription

1 ENTREPRENEURSHIP ON THE ONE BELT ONE ROAD March 22-23, 2018 NilaiSprings Resort Hotel Nilai, Malaysia

2 ENTREPRENEURSHIP DEVELOPMENT AND SOCIAL ENTERPRISE: CATALYSTS OF ECONOMIC TRANSITION IN BANGLADESH Authors Niaz Mohammad Assistant Professor Department of Accounting Faculty of Business Administration American International University-Bangladesh Rashedul Hasan Senior Lecturer Department of Accounting and Finance Faculty of Business Nilai University, Malaysia ASIAN CONFERENCE ON ENTREPRENEURSHIP 2

3 INTRODUCTION Social entrepreneurship is growing fast. However, its success depends on social entrepreneurs to be part of a broader system Awareness of the different layers behind local problems are necessary to increase impact as change agents. Women in social enterprises make up 41% of the fulltime equivalent workforce, more than double than in the general workforce in Bangladesh. The small and medium enterprises (SMEs) sector in Bangladesh has a very pivotal role to play in the development of the country November, 2017 (ACE 2017) 3

4 DEFINITION OF SMALL AND MEDIUM ENTERPRISE Small Enterprise Medium Enterprise No Sector FA other than land and Building (in TK) 1 Service 50,000-5,000,000 Employed Manpower (no above) 25 No Sector FA other than land and Building (in TK) 1 Service 5.000, ,000,000 Employed Manpower (no above) 25 2 Business 50,000-5,000, Business 5.000, ,000, Industrial 50,000-15,000, Industrial , ,000, I TK = USD, RM ASIAN CONFERENCE ON ENTREPRENEURSHIP 4

5 GROWTH OF SME IN BANGLADESH Small and Cottage Medium-Large Total 5

6 ROLE OF SME IN THE ECONOMY OF BANGLADESH According to BSCIC (2009), small and cottage industries accounted for per cent of total industrial establishments in 2008\2009. About 90 per cent of total employment and more than 55 per cent of total manufacturing value added originated from SMEs. In another estimate, there are around small industry units and 611,612 cottage industry units, which provide employment of nearly 3.5 million people. When handlooms are added, the number of cottage industry units alone shoots up above 700,000 (BSCIC, 2009) November, 2017 (ACE 2017) 6

7 STEPS TAKEN BY CENTRAL BANK IN SME DEVELOPMENT IN BANGLADESH An indicative target for SME loan disbursement has been set for 2010 by the banks. 'Area Approach Method' to attain their indicative targets separately by dividing it as branch wise, region wise & sector wise. Establishment of a separate Women Entrepreneurs Dedicated Desk to provide training on SME financing Branch wise list of Women Entrepreneurs Dedicated Desk sent to SME and Special Programmes. Banks and financial institutions may sanction up to Tk. 25,00,000 to women entrepreneurs against personal guarantee. 7

8 SPECIAL ARRANGEMENT FOR WOMEN ENTREPRENEURS At least 15% of total BB refinance fund for SME sector has been allocated for women entrepreneurs. Interest rate for women entrepreneurs will be Bank rate (which is at present 5%) plus maximum 5%; i.e. not more than 10% per annum. Banks/Financial Institutions will accept and settle all types of loan applications of SME women entrepreneurs with the highest priority. Banks and financial institutions shall take initiative to advertise all the facilities for women entrepreneurs in both electronic & print media. Banks and Financial Institutions may provide a maximum loan facility of Tk.2,500,000/- against personal guarantee if borrower is woman or majority of the owners of the enterprise are women. Banks/Financial Institutions shall establish special advice and service centre for women entrepreneurs in selected branches and ensure service friendly approach towards women entrepreneurs. 8

9 KEY PLAYERS IN THE SME DEVELOPMENT Building Resources Across Communities (BRAC) Grameen Bank Association for social advancement (ASA) SME Foundation 9

10 SWOT ANALYSIS OF SME FOUNDATION Strength Legal mandate with single mission of developing SMEs in the country Diversified manpower commensurate with heterogeneous facets of development of SMEs Weakness Inadequate finance Inadequate legal backing SWOT Opportunities Adequately sensitized environment and political endorsement Adequately conducted background work Threat The required institutional reform and support required for an effective and functional are not foreseen. 10

11 ISLAMIC SOCIAL ENTERPRISES IN BANGLADESH Islam views entrepreneurship as integral for progress of human civilization and made engaging in business activities as obligatory upon the community (Fard-al-Kifāyah) as opposed to the individual (Molla et al., 2015). Awqaf can be considered an Islamic social enterprise due to the underlying business activity that it operates. The innovative cash Waqf is used by commercial banks like Social Islami Bank Ltd to allow benefactors to set aside capital to generate income for needy beneficiaries. Rural Development Scheme (RDS) established by Islami Bank Bangladesh Ltd (IBBL) is good example of Islamic microfinance schemes in Bangladesh. 11

12 CASH WAQF BASED CROWDFUNDING MODEL ASIAN CONFERENCE ON ENTREPRENEURSHIP 12

13 CONCLUSION Barriers to growth and financing constraints vary widely across enterprise size, location, leader characteristics and even years of operation. This variation suggests any policies and programmes intended to support social enterprise in the future will need to be targeted in order to be effective. Female-led social enterprises do not have sufficient access to capital as a barrier. Networking interventions could potentially be a powerful resource for women entrepreneurs 13