Growth of economic units slows amid capital shortages
The growth in the number of economic units in Bangladesh has slowed over the past decade, primarily due to capital shortages among rural entrepreneurs, according to the latest Economic Census of the Bangladesh Bureau of Statistics.
An economic unit is defined as a single establishment or economic household engaged in economic activities for profit, household gain, or indirect benefit to the community.
The total number of economic units in the country stood at 1.18 crore in 2024, marking a 52 percent increase from 78 lakh units in the previous census, conducted between 2001 and 2013.
This is significantly lower than the growth rate of 110 percent that was reported in the previous census, according to the preliminary report of the Economic Census 2024, released yesterday.
This was driven by a slowdown in the growth in the number of economic units in rural areas over the last decade, which dropped by nearly two-thirds compared to the previous decade.
Between 2013 and 2024, rural economic units grew by 49 percent, reaching 83 lakh. In contrast, the previous census saw a much higher growth rate of 141 percent.
Meanwhile, urban economic growth remained almost unchanged, standing at 58.38 percent in 2024 compared to 58 percent in 2013, reflecting stagnation.
The share of economic units in the manufacturing industry saw a downturn, reducing from 11.54 percent in the past census to 8.77 percent in the latest. In turn, the share of economic units in the services sector saw an uptick, increasing from 88.46 percent to 91.23 percent.
Additionally, the latest survey found that around 94 percent of the unit heads are male while just 6.46 percent are female, down from 7.21 percent in the previous survey.
For the first time, the BBS has introduced some new indicators that highlight problems faced by economic units.
Among the nine challenges identified, nearly 86 percent of entrepreneurs cited a lack of capital as a major problem.
Additionally, 34 percent reported difficulties in accessing easy loans.
"The number of entrepreneurs is higher in rural areas than in urban areas. But rural entrepreneurs face discrimination in accessing capital," Planning Adviser Wahiduddin Mahmud said while speaking as the chief guest at the report launch event in Agargaon.
He explained that while urban business tycoons secure loans and often default, rural entrepreneurs struggle to access financing for their businesses.
He used Beximco Group as an example.
"They have grown rich overnight based on loans. They have nothing other than loans. Now most of the factories are closed. The government is running their operations," he said.
"There is no shortage of entrepreneurs in Bangladesh, but access to capital remains a real challenge," he added.
Furthermore, job opportunities in rural areas have shrunk over the 11 years since 2013, reflecting a lack of growth in non-farm activities.
The census reveals that 56.82 percent of 3.07 crore people were engaged in economic activities in rural areas in 2024, down from 61.23 percent in 2013.
However, the number of people involved in economic activity increased overall during this period as the economy expanded, leading to an increase in the number of economic units, the BBS stated while launching the census at its office yesterday.
On the other hand, urban areas have created more economic opportunities since 2013. The BBS reported that 43.18 percent of people were engaged in economic activities in urban areas in 2024, up from around 39 percent in 2013.
In urban areas, the number of people involved in economic activities stood at 1.32 crore in 2024, with Dhaka Division accounting for 89 percent of the total. Chattogram ranked second, followed by Rajshahi.
Overall, the BBS found that 70.27 percent of economic units operate in rural areas, while 29.73 percent are located in urban areas.
Dhaka Division hosts the highest number of economic units, totaling 32.1 lakh, contributing 27.03 percent of the total in 2024, up from 24.23 percent in 2013.
Additionally, the country has 116,978 e-commerce economic units, with Dhaka hosting the largest portion of around 47.42 percent or 55,474 units.
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