Jahangir Alam, owner of a small shoebox workshop in the Kamalpur area of Bhairab, was supposed to pay Tk 18,000 as the last instalment of a bank loan on November 12. But he did not have the means to pay it.

He discussed the matter with the bank and deferred it to November 20. Sadly, he failed to make the payment again.

Alam then requested the bank to extend the time again until the last week of this month. But in spite of his plea being granted, he is still concerned over whether he would be able to come up with the money.

"Banks are repeatedly asking to repay the loan. The last instalment must be paid at the end of this month even if it comes to borrowing from another source. There is no other way," he said.

He had taken Tk 6 lakh under a loan category meant for small-and-medium enterprises (SMEs) from a Bhairab Bazar branch of Brac Bank PLC in January 2022 for a two-year term.

"The business situation was already bad due to the overall economic situation of the country. When the strikes and blockades started, the situation started getting worse," said Alam, owner of Faria Box House.

There have been 14 days of blockades since October 31.

His buyers too have not paid their dues, reasoning that shoe sales have decreased a lot.

"Yesterday, when I visited markets to collect dues, I received only Tk 3,000 from them. What can I do with this money? Will this meet workers' pay? Will it bear family expenses? Or will I be able to repay the bank loan?" he asked.

Other than Alam, many other entrepreneurs of cottage, micro and SMEs in Bangladesh are finding it impossible to repay their bank loans on time due to the current economic crisis.

Some entrepreneurs said they were repaying bank loans by borrowing from friends and relatives to avoid increasing the bank debt burden.

The SME sector is considered to be the country's lifeline, accounting for about 25 percent of the gross domestic product (GDP).

There were 78.8 lakh business establishments in the country, according to Economic Census 2013 of the Bangladesh Bureau of Statistics.

Of them, 87.52 per cent were cottage, 1.33 per cent micro, 10.99 per cent small, 0.09 per cent medium and 0.07 per cent large enterprises.

Enterprises running small-scale operations in Bangladesh are suffering from a significant fall in sales at a time when inflationary pressure has pushed up production costs, according to a number of entrepreneurs.

Consumers are buying fewer products due to the rise in the cost of daily necessities and economic uncertainties stemming from multiple crises, they said.

In addition, most enterprises running small-scale operations are witnessing a substantial drop in profits due to higher raw material and transportation costs, forcing them to lay off employees just to survive.

Mohammad Swapan, owner of Abir Shoes at Nurul Haque Master Lane in East Madarbari area of Chattogram, said business centring the production and sale of loafers is very bad at present.

Earlier, he was able to sell goods worth Tk 3 lakh to Tk 4 lakh every month. Now, it has come down to less than half of that.

Profit margins have also come down significantly due to the increase in cost of production, he said.

"Timely repayment of loans is very difficult in the current business situation. For the past three months, I have been paying a bank loan borrowing money from my younger brother," he said.

Swapan informed that he had availed the loan of Tk 4 lakh from a City Bank branch in Kadamtali of Chattogram five months ago for a period of 18 months.

His business was able to come up with only the first two instalments.

Many SME entrepreneurs are now struggling to repay loans within the stipulated timeframe, said Syed Abdul Momen, head of SME at Brac Bank PLC, one of the market leaders in SME financing and retail banking.

"We are trying to give the opportunity to entrepreneurs so that they can repay the loan even if it takes a bit more time," he said.

If it takes any longer, interest will further accumulate, putting more pressure, he added.

Those who are repaying loans timely are having to make a lot of other sacrifices, said Momen.

Any fall in people's movement and economic activities has an effect on people one way or another, said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.

One of the implications is that SME owners are unable to repay their loans on time, he added.

Moazzem thinks that the country's SME entrepreneurs are not facing that much of a challenge as banks are extending repayment periods while support is still available to the businesses from informal sources.

But if the challenges persist, the scale of operations of the businesses will be reduced, he said.

In other words, political stability must be brought about by the government and political parties in the interest of the country, he said.

The central bank can also make SME loan repayments more flexible, Moazzem added.