The government is preparing SME Policy 2025 to increase the contribution of small and medium enterprises (SMEs) to the economy, SME Foundation Chairperson Md Mushfiqur Rahman said today.

The new policy is currently under formulation, as the 2019 SME policy is set to expire, he said.

The five-year SME Policy is scheduled to come into effect in July this year and end in June 2030, he added.

The draft policy includes 10 strategic objectives for developing SMEs in Bangladesh, Rahman said at a workshop on the opportunities and challenges of SME Policy 2025. The event was organised by the SME Foundation and supported by the Economic Reporters' Forum (ERF) at its office.

SMEs contribute approximately 28 percent to Bangladesh's gross domestic product (GDP) and account for about 85 percent of employment in the industrial sector, the SME Foundation chairperson said.

The foundation is working to help the sector flourish, he said, citing its activities such as holding SME fairs at the national level and supporting entrepreneurs.

He added that the SME Foundation has identified 177 SME clusters across the country and is implementing various development programmes to address the needs of cluster-based entrepreneurs.

Rahman said the new SME policy will play a vital role in increasing the contribution of SMEs to GDP to 35 percent by 2030.

SME Foundation Managing Director Anwar Hossain Chowdhury noted that the contribution of cottage, micro, and SMEs to GDP in Bangladesh is much lower than in some neighbouring countries.

In Pakistan, SMEs account for 40 percent of the economy.

In Sri Lanka, India, and China, the share of SMEs in GDP stands at 52 percent, 37 percent, and 60 percent, respectively, he added.

ERF President Doulot Akter Mala chaired the event.