Most of the owner of small enterprises are struggling hard to repay their bank loans as the financial activities decreased drastically due to the political unrest and turmoil in the country for last couple of months. This happens to be a scenario from all over the country. Many of them are struggling with financial constraints, requested another extension until the end of the month. While their plea was accepted, the uncertainty of generating the required funds continues to weigh on him.
The adverse economic situation has affected numerous entrepreneurs in Bangladesh, particularly those in the cottage, micro, and SME sectors. Some are resorting to borrowing from friends and relatives to meet loan obligations and prevent an escalation of their debt burden.
The SME sector, contributing significantly to the country’s GDP, faces challenges such as decreased sales, rising production costs, and economic uncertainties. Entrepreneurs cite reduced consumer spending, higher raw material and transportation costs, and diminished profits as factors contributing to their struggles.
Amidst these challenges, many SME entrepreneurs are finding it difficult to adhere to loan repayment schedules. Financial institutions, including market leaders like BRAK Bank PLC, are attempting to accommodate entrepreneurs by providing flexibility in repayment periods. However, concerns persist about the accumulation of additional interest if the delays continue.
Syed Abdul Momen, head of SME at BRAK Bank PLC, acknowledged the difficulties faced by entrepreneurs and emphasized the bank’s efforts to extend support. Meanwhile, experts, such as Khondaker Golam Moazzem from the Centre for Policy Dialogue, underscore the importance of political stability and suggest potential interventions, including greater flexibility in SME loan repayments by the central bank.
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