Micro enterprises in the post-pandemic economy of Bangladesh

The Ashshash project aims to support 4,500 human trafficking survivors (70 percent women) to help them reintegrate into society through psychosocial counselling, skills and entrepreneurship training, and sustainable employment. Additionally, the project will reach 250,000 people, directly or indirectly at the community level, through various awareness-raising activities on human trafficking and safer migration. The main objective of Ashshash is to support women and men who have escaped trafficking, so that they can restore their dignity and well-being, and become self-sufficient. Switzerland's strategic engagement in migration aims at tackling the root causes of irregular migration and forced displacement, while promoting the potential of safe, orderly and regular migration to advance sustainable development and the achievement of the 2030 Agenda. In Bangladesh, Switzerland is working to improve the living conditions of the poor and the disadvantaged by bringing local governments closer to the communities they serve, fostering economic development to create more market opportunities and boost income levels, improving framework conditions to create a safer and better governed labour migration system, and through various humanitarian aid interventions. To promote sustainability across these key areas of focus, Switzerland is working closely with Bangladesh's private sector as well.

Dipta Rakshit, Team Leader, Ashshash Project, Winrock International

The project's key activities and programming are centred on the social and economic empowerment of human trafficking survivors through psychosocial counselling, skills and enterprise development training, and sustainable employment. A key aspect of our core objective is to develop microentrepreneurs (from its beneficiaries) across vulnerable communities from the project's key operational districts of Jashore, Khulna, Satkhira, Chattogram, and Cox's Bazar. To effectively build capacity, we have also partnered with the International Labour Organization (ILO) through their flagship programme called 'Start and Improve your Business' (SIYB). SIYB aims to help microentrepreneurs by providing them with financial literacy, business plan development support, and entrepreneurship training. Additionally, they are supported with start-up capital so that they can set up and start their respective businesses. Furthermore, to ensure the sustainability of businesses amongst the project's pool of microentrepreneurs, we continue to actively seek avenues of collaboration with public and private sector entities, and forge strategic partnerships. Around 70 percent of our beneficiaries are women, as we have a special focus on women entrepreneurs under the umbrella of Micro, Small, and Medium Enterprises (MSMEs).

The Covid-19 pandemic has significantly hampered the growth of these small enterprises. Throughout the pandemic, these MSMEs have struggled severely and have not received the necessary support from the private sector or governmental organisations. Specifically, microentrepreneurs experienced difficulties accessing the government grants, which can be attributed to the complex selection criteria. Organisations working specifically with CSR should step forward to support microentrepreneurs in this respect. Private sector organisations can also provide additional support via technical assistance and effective resource mobilisation.

A sizeable contribution in the MSMEs and the overall economic advancement of Bangladesh are derived from women entrepreneurs and businesses operated by human trafficking survivors. However, their vulnerabilities and dependencies have multiplied significantly as a direct impact of the Covid-19 pandemic. Hence, effective provision of support services to microentrepreneurs can in turn facilitate support for human trafficking survivors as well.

Ferdaus Ara Begum, CEO, BUILD Bangladesh and moderator of the session

The government has disbursed stimulus packages worth BDT 1.8 trillion as of June 2021. While almost 5.8 crore people have benefitted from these stimulus packages, we have no information on the extent to which microentrepreneurs have received and benefitted from the funds. That is why it is necessary to establish a database and determine just how many SMEs have received funds from these stimulus packages.

Muntasir Hossain, Head of Social Impact, Grameenphone

Grameenphone strongly believes that the future of entrepreneurship is in the digital/cyber-space, and we witnessed this firsthand during the pandemic. That is why we have developed a variety of tools to help small and microentrepreneurs. In the near future, we are planning to launch a virtual knowledge base for small and microentrepreneurs, which will include tools and learning resources. Tracking, mobile broadcasting, and video broadcasting will be some of the tools ingrained in our strong ICT portfolio to support entrepreneurs.

Ashraful Islam, Private Sector Engagement Manager, Ashshash Project, Winrock International

Collaborations and partnerships with relevant stakeholders can play an important role in accelerating the economic recovery of these microenterprises and, in turn, the microentrepreneurs.

The Ashshash project works with its social protection partners as well as the training service providers to reintegrate them socially and equip them with market-driven skills development for waged employment, decent jobs, and microenterprise development. Going forward, we may consider replicating some of the proposed methods, programming and measures undertaken by other countries to support MSMEs in the post-pandemic stage.

Mohammed Zahidullah, Head of Sustainability, DBL Group

DBL Group itself is an archetypical example of sustainable growth and development, having started as a small enterprise. We have always ensured exemplary support services for our workforce, and our services are aimed at forging ownership and shared values to address their needs. Our flagship 'Fairprice Shop' chains aim to do exactly that by facilitating a wide range of products on credit (and subject to significant discounts) for DBL's workforce.

Saba El Kabir, Manager, Corporate Affairs, Brand and Marketing, Standard Chartered Bank Bangladesh

There is a need for holistic support for returnee migrants rather than just financial support, emergency support, and/or relief materials. We need to collectively think about the sustainability of these afflicted people through the lens of skills and enterprise development. When working with these vulnerable groups, digitisation and automation are crucial to reduce the overall costs borne by them.

Naimul Hasan Khan, Unit Head, SME Banking Division, Mutual Trust Bank Ltd.

Dedicatedly for CMSMEs, we have 23 lending products, and there is scope for collateral-free loans. We need collaboration between the corporate sector and NGOs that are working with returnee migrants.

For human trafficking survivors specifically, the CSR funds can be mobilised as per specific policy or strategy but a great degree of 'hand-holding' must be ensured during the facilitation of these amounts in loans. Private sector organisations must also collectively assess credit requirements for business growth and evaluate how the financing programmes can effectively reach microentrepreneurs.

Syed Abdul Momen, DMD and Head of SME, BRAC Bank

For microenterprises, facilitation in the short run is entirely possible if business growth and progress can be ensured. It is therefore crucial to sensitise board members on MSMEs, and the role they play in the development of microentrepreneurs.

Although the central bank has allowed for the opening of bank accounts for microentrepreneurs without trade licenses, loan facilitation is difficult regardless. That is why the government should allow financial institutions to disburse loans of less than Tk 10 lakh without the need for trade licenses.

Fakhrul Hasan, HR Officer, Square

I think the best way to facilitate small entrepreneurs is by integrating them with the value chain of a company. For instance, Square Pharmaceuticals has successfully integrated this approach for multiple products, both domestically and abroad. 

Asif Saad Bin Shams, Deputy Managing Director, IDLC

IDLC can aim to help these microentrepreneurs through guidance and training. We have specific formats on the processes of procuring trade licenses in a simplified manner which can, in turn, help microentrepreneurs with the application processes.

Nurul Afser, Head of Corporate Affairs, Pran-RFL Group

As a partner of Winrock, PRAN-RFL has been actively working to support the victims of human trafficking amidst the pandemic by providing food and other forms of emergency supply-based support. Through one such key programme, we have also facilitated decent wage employment for beneficiaries who attained skills training from the project.

Saad Omar Fahim, Secretary General, Swiss-Bangladesh Chamber of Commerce and Industry (SBCCI)

The issue of trafficking is a sensitive and dire one and the Swiss government has been working hand in hand with the Ashshash project to facilitate support for the victims. However, we believe that private sector organisations can play an important role here. There are many Swiss companies based in Bangladesh that are involved with various forms of CSR activities. Examples include Syngenta and Novartis that are working with the up-skilling and re-skilling of migrant workers, for socio-economic development. If we can design a module to support the victims of trafficking, then the SBCCI can explore opportunities to identify organisations willing to work with Ashshash.

Mirza Nurul Ghani Shovon CIP, President, National Association of Small and Cottage Industries Bangladesh (NASCIB)

If we want to help women entrepreneurs, then both the government and private sector organisations need to come forward to support them through innovative initiatives. In our country, MSMEs form a significant part of the collective workforce, and the government wants to expand their ventures even further. The key problems that small and microentrepreneurs are facing include a lack of information and facilities in their favour and limited opportunity for technological upgrades. If we want microentrepreneurs to succeed, then we must ensure that they are effectively and sustainably skilled, and we can do this by facilitating skills development training for them.

K Shohel Rana, Project Officer, ICMPD

While some organisations are helping victims of trafficking and returnee migrants directly, we still need the support of financial institutions, chamber of commerce, business agencies, and development organisations. These stakeholders should collaboratively establish a platform that will work towards supporting the survivors of trafficking, possibly by utilising CSR funding.

Key recommendations

• The corporate sector should utilise its CSR funds to support entrepreneurs who have not received government grants.
• The corporate sector should support small and microentrepreneurs through technical assistance and resource mobilisation.
• Establish a database to track the total number of MSMEs that have received stimulus packages from the government.
• Facilitate a sustainable ecosystem for SMEs, where different components such as policies, finances, culture, leadership, human capital development, etc., can be strictly monitored.
• Use support payments, one-off cash payments, interest, credit relief and business grants to support MSMEs.
• Banks should come forward to address the financing gap in the SME and MSME sectors.
• The central bank should allow the facilitation of small loan amounts (under Tk 10 lakh) to be availed by MSMEs without trade licenses.
• Establish a singular platform between relevant stakeholders that will support victims of human trafficking through training, information, and financial support.