The Development Imperatives of SMEs in Bangladesh

Abstract

SMEs are the engine of growth in Bangladesh. There are about 6.0 million SMEs in the country. About 90 per cent of all industrial units in Bangladesh are SMEs generating about 25 per cent of the GDP, employing about 31 million people and providing 75 per cent of household income. Various categories of SMEs together contribute between 80 per cent to 85 per cent of industrial employment and 23 per cent of total civilian employment in Bangladesh.

About 60 per cent 65 per cent of SMEs are located outside the metropolitan areas of Dhaka and Chittagong. SMEs are providing job opportunities to about 70-80% of the non-agricultural labour force. The SME share in manufacturing value added to GDP varies at 28-30%. The services sector is primarily composed of SMEs, which is responsible for the bulk of employment growth. SME contribution to national export is significant through different industries such as ready-made garments, jute, and leather etc.

Electrical and electronics, light engineering, and plastic goods, leather goods and footwear, agro-processing, fashion designing, knitwear and readymade garments, pharmaceuticals, jute and jute goods, handicraft, frozen fish, ceramics and furniture are the most promising SME industries in Bangladesh.

Keywords: SME, MSME, Bangladesh