The world of Jannat Sultana Reeta, a fashion boutique entrepreneur in Narayanganj, turned upside down in 2013 when her husband was diagnosed with liver cirrhosis. She had to step up to take the charge of the family as a breadwinner. 

She had been doing well as her products were becoming increasingly popular until the coronavirus pandemic dealt a massive blow as many businesses like hers suffered for the slowdown caused by the health crisis.

She invested a part of her earnings to revive the business but sales did not pick up as expected despite the reopening of the economy, forcing her to lay off some employees.

Things turned from bad to worse after her husband was infected with Covid-19 in July 2020. Later, he succumbed to the virus, leaving Reeta and their two children behind.

"It was a tough time as I had to fight for a living as well as survive in the face of the infectious virus. I have never faced such a difficult time in my life," said Reeta.

She had to concentrate on her business 13 days after the demise of her husband to feed the kids.

In August last year, she hired three workers although she was far behind the monthly sales of nearly Tk 70,000 posted during the pre-pandemic period.

Reeta now records sales of around Tk 50,000 monthly but her business is not expanding as she cannot reinvest.

"If I don't get a loan from a bank now, I will not be able to grow my business. But the volume of my business is not big enough to be eligible for a bank loan."

She contacted an official of a private bank in Narayanganj to secure a loan from the stimulus package announced by the government to support businesses and industries but her efforts went in vain.

"Although the situation is better now than in the past, it is very difficult to sustain the business because of the fund crunch," said Reeta while waiting for visitors at the SME Product Fair at the Bangabandhu International Conference Centre in Dhaka.

Many cottage, micro, small and medium enterprises (CMSMEs), which account for nearly a fourth of Bangladesh's gross domestic product, have not received financial support even though Bangladesh Bank unveiled a stimulus package worth Tk 20,000 crore for the sector in April last year.

Of the sum, 77 per cent was disbursed. The central bank has allocated another Tk 20,000 crore for the current fiscal year as the economy is yet to return to normalcy from the slowdown. Around Tk 2,800 crore was disbursed as of November 28.

Suman Chandra Saha, deputy general manager for finance and credit services at the SME Foundation, says many small and micro businesses do not have the documents required to get a loan from the government-announced incentive. As a result, they are being deprived of the credit facility.

The foundation has received Tk 300 crore from the government to disburse among SMEs. Of the sum, Tk 100 crore was disbursed among 926 people, of which 33 per cent were women, in the last financial year.

Tk 150 crore has been disbursed among more than 1,500 entrepreneurs so far in the current fiscal year. The SME Foundation has targeted to lend the rest by December.

Speaking to The Daily Star at the venue of the fair, more than a dozen SME entrepreneurs said the situation has been improving after the lifting of a second lockdown in August this year.

However, like Reeta, many SMEs still cry for funds to recover from losses at a time when large businesses are seeing their turnover and profit return to pre-crisis levels.

The recovery rate of the SME sector is weaker than expected because of their weak financial health compared to that of large industrial units.

Such a condition would not have happened were they able to manage sufficient finances to run businesses, which suffered massively because of the pandemic-induced economic slowdown since March last year, according to the entrepreneurs. 

"Before the pandemic, there were six employees at each outlet. Now there are only two," said Asaduzzaman Majumder, director of Century's Sweets Bakery & Café.

Having started its journey in Dhaka in 2012, the company had 12 outlets in the capital before Covid-19. Seven of these outlets have since been shut amid the crisis.

What is more, the size of the outlets had to be squeezed to a third.

"We are trying to stay afloat by reducing the number of workers and closing some outlets," Majumder said.

The firm contacted two banks but loans were not available.

"As our business is not in good shape, banks are not interested in giving loans," he said, adding that he wanted credit on easy terms.

Sanaul Haque Babul, owner of AB Fashion Maker, which sells garment items, has not given up the hope of making a turnaround. 

"I could not do any business in the last four Eid festivals in the past two years. I had laid off half of my 100 employees owing to lower sales. Cost-cutting has to be done in many areas."

Recently, he has hired some workers.

Babul hopes if there are no more setbacks before the next Eid, which is five months away, he will be able to recover the business to some extent.

He has also forayed into digital printing to diversify his income.

At least 80 per cent of CMSMEs were affected by the pandemic, according to Md Ali Zaman, president of the SME Owners Association of Bangladesh.

Almost all CMSMEs were closed for at least three months between April and July in 2020. Big industrial units were not closed during the same period, he said.

Selim Raihan, executive director of the South Asian Network on Economic Modeling, a think-tank, says entrepreneurs in the SME sector are trying to make a comeback.

"But the recovery is slow because they have not received assistance from the government. We've repeatedly asked the government to introduce a separate window to give them loans."

"The government should support them by using the network of microfinance institutions."