SMALL IS BEAUTIFUL: ACCESS TO SME FINANCING HAS BEEN CREATING ROBUST EMPLOYMENT OPPORTUNITY
IDLC Finance Limited and Policy Research Institute (PRI), Bangladesh have jointly conducted quantitative research titled ‘ACCESS TO FINANCE FOR SME & IMPACT ON JOB CREATION: EMPIRICAL EVIDENCE BASED ON IDLC FINANCE LTD’. Senior Economist, Academician and Member of PRI, Dr Bazlul Haque Khondker presented the findings supported by his analysis over a virtual press conference on 24 November 2020 The session was moderated by Dr Sayema Haque Bidisha, Professor, Department of Economics, Dhaka University. Dr Ahsan H Mansur, Executive Director, PRI Bangladesh; Arif Khan, CEO and MD, IDLC Finance Ltd; eminent journalists, IDLC and PRI officials were present during the paper presentation followed by an interactive question and answer session.
THE OBJECTIVE OF THE STUDY WAS TO ASSESS THE EMPLOYMENT IMPACTS OF IDLC LOANS TO THE SMES CONSIDERING THE FOLLOWING ASPECTS BY
Gender of (female and male) entrepreneurs; Types of enterprises (manufacturing, services, trading and agro-business); Major job categories (labor/worker, skilled workforce, salesperson, and executives); Loan sizes (below 10 lacs, 10 -25 lacs, 25- 50 lacs, 50-75 lacs) Locations or regions of their operations.
OBSERVATIONS
Growth in employment generation in IDLC assisted SMEs were large – when the time frame of inception to 2019 is considered.
Employment generation in female-owned sample enterprises was significantly higher.
When compared between male and female owned enterprises, the employment growth in female-owned sample enterprises was 45.7% points above the growth rate recorded in male-owned sample enterprises. Thus, more focus was recommended by the authors.
Average employment size for IDLC enterprises stood at around 16 person per enterprise which is close to national average
also an indication of saturation point.
Largest employment growth is observed in service and manufacturing. Interventions in these sectors would probably be more rewarding.
The largest growth rate has been found for salaried jobs with 134% over the entire period.
The turnover in Chottogram is almost double that of other three regions. This finding may help IDLC and other institutions engaged in MSME lending to review their regional credit portfolios and therefore act accordingly.
Doubling of enterprise turnover in the 4-year period through 2019 was a very healthy development. Signs of healthy portfolio with limited loan loss and pointed to further expansion of IDLC MSME portfolio with limited risk.
As the analysis is based on Pre Covid-19 data, IDLC like other financial institutions globally may face post-Covid challenges.
Feed Industry of Bangladesh: Sustaining Covid-19 and Potentials in Upcoming Days
Feed Industry of the country: Surviving the Outbreak of COVID-19
The agricultural industry of Bangladesh remains of pivotal importance, contributing 13.35% to the GDP of the country. Out of this, 4.95% is contributed by poultries and fisheries, which would not have been possible without proper nutrition provided by the feed mills. This establishes the far-reaching importance that feed mills hold in ensuring quality output from the agricultural sector. Globally, the feed industry generates about US $400 billion from compound annual feed production of 1 billion tonnes. Over 130 countries are involved in the production process or sale of feed which generates employment opportunities for many.
In an obvious attempt to contain the virus, governments all over the world, introduced lockdowns, limitations on travel and business opening hours. All of these has had an unnerving impact on the feed industry alongside many others. Lockdowns and logistical blockages have created movement restrictions, halting business activity. And no just that, even rumors concerning the spread of coronavirus through poultry and other meat consumption has had a significant impact on the industry’s turnover. Supply chain disruptions leading to a loss in dairy and meat products have affected the feed market as well. Disruptions in the supply chain created wastage despite high demand in the markets, and trade halts have stopped raw materials from coming into the country which had severely impacted the feed mills industry and its stakeholders.
However, lockdowns have given a lot of people time to reflect on many decisions and directed them towards taking healthier steps, for instance. The increased consumption of meat, alongside growing awareness about livestock nutrition has led to an expansion of the market size of feed and feed additives globally. In Bangladesh, commercial feed production experienced a near 25% growth over the last decade. A number of feed mills were established to meet the upsurge in feed demand and the local market expanded subsequently, with poultry feed holding the most market share, followed by fish feed and then cattle feed.
With the world slowly stabilizing after the impact of the pandemic, the only hope is to look ahead into the future towards a prosperous local and global feed industry, and a safer and healthier world.
Sushmita Saha
Assistant Manager
IDLC Finance Ltd.