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Constraints of Entrepreneurship Development in Bangladesh & Policy Support

MAMUN RASHID Outgoing CEO, Citibank, N.A. Bangladesh 27 MARCH, 2011. Constraints of Entrepreneurship Development in Bangladesh & Policy Support. Entrepreneurship in Bangladesh.

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Constraints of Entrepreneurship Development in Bangladesh & Policy Support

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  1. MAMUN RASHID Outgoing CEO, Citibank, N.A. Bangladesh 27 MARCH, 2011 Constraints of Entrepreneurship Development in Bangladesh & Policy Support

  2. Entrepreneurship in Bangladesh • Factors such as political, social, cultural, technological, natural, and personal shape up the overall development process of entrepreneurship and its sustainability in long run. • Local economic factors such as size of the local market, supply & demand generated by local purchasing power influence the entrepreneurs’ business decisions. • Labor and its availability and price (wage) are also considered as crucial factor in entrepreneurship development.

  3. PROBLEMS For New Entrepreneurs – Lack of Experience, Limited Knowledge Lack of proper information Searching for source of Investment, Financing Inflation, Political Instability, Lack of Social Security Regulatory Challenges, Nepotism Lack of Corporate Governance Inadequate Infrastructural facilities Implementation Challenges

  4. PROBLEMS…cont. • The financial institutions, like banks, non banks and micro-finance institutions extend support in the form of loans to the entrepreneurs for business development. • In most of cases it has been found that the new and small-scale entrepreneurs fail to repay the loan in time or there are recurring past dues due to delay in project implementation. This discourages the banks or Financial Institutions to support the new entrepreneurs. • There is limited availability of venture capital (VC) in Bangladesh. • The financial institutions cannot accept the proposal unless complete information is provided. It is their observation that the details provided by the applicants are based on assumption, and not on currently available data.

  5. PROSPECTS For a country like Bangladesh, effective entrepreneurial initiatives can play a significant role in development outcomes. Bangladesh, with its high population density and widespread poverty, is a challenging environment for development initiatives. This huge pool of human resources can be used effectively for economic growth by discovering their entrepreneurial capacities. If this population can effectively be promoted with entrepreneurial skill (engage, enrich, empower), they can significantly contribute to the economic development.

  6. PROSPECTS…cont. • Govt of Bangladesh had set up Small & Medium Enterprises (SME) foundation in 2007 • Equity Entrepreneurship Fund (EEF) was set up by Bangladesh Bank • Palli Karma-Shahayak Foundation (PKSF) and MIDAS are also on the supporting role. • While PKSF and MIDAS have played significant role in micro entrepreneurship development, EEF could not play its due role due to lack in commitment. SME Foundation is mostly focusing on advocacy and capacity development. • The entrepreneurs on the ground need more support on business plan development, various sources of funding, both equity and debt, encouraging regulatory support , supportive law and order situation, adequate marketing challenge and respectable financial management skills.

  7. QUESTIONS???? Thank You

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