Four consecutive high-level meetings of the Investment Coordination Committee (ICC) have been held as part of a major initiative to position the Small and Medium Enterprise (SME) sector as a core driver of the national economy.
Key reforms and decisions are underway, with several significant policy changes already implemented, the chief adviser’s press wing reported on Saturday.
The meetings were attended by senior officials, including ICC Chair and Chief Adviser’s Special Envoy for International Affairs Lutfey Siddiqi, Bangladesh Bank Governor Dr Ahsan H Mansur, National Board of Revenue (NBR) Chairman Abdur Rahman Khan and representatives from both government and private sectors.
The discussions primarily focused on ensuring entrepreneurs’ direct participation in policy-making to fully integrate the SME sector into the economic mainstream.
Key decisions and initiatives include:
- Foreign currency retention: Measures are being introduced to remove the mandatory deposit of 10% of funds received from foreign orders in banks.
- Foreign currency quota: The SME Foundation has proposed allocating a separate foreign currency quota of at least $3,000 per year per business, now submitted to the Bangladesh Bank governor.
- HS code simplification: Following an August 28 meeting, the NBR decided that customs assessments will now be completed if the first four digits of the eight-digit Harmonised System (HS) code match, easing a long-standing complexity for traders.
- Export documentation: Open account export transactions, including coverage by local insurance companies, have been authorized.
- Advance payment limits: The limit for advance payments without a bank guarantee has been increased from $10,000 to $20,000, while the payment limit from Export Retention Quota (ERQ) accounts has been raised from $25,000 to $50,000.
Decisions from the October 9 Bangladesh Bank meeting include:
- Financial product design: The SME Foundation and the SME & Special Programs Department will jointly conduct a workshop to develop entrepreneur-friendly financial products and working capital solutions.
- Policy evaluation: The effectiveness of the SME Master Circular will be assessed through performance evaluations.
- Loan feasibility: The department will study the feasibility of providing loans up to Tk5 lakh without requiring a trade license.
- Interest rate review: The department will explore whether customer-level interest rates can be adjusted to make the bank’s refinancing program more attractive.
Earlier meetings, including an August 28 session at the Chief Adviser’s Office, focused on challenges such as delayed payments, duties, licensing, and credit access.
A September 21 session devoted two hours to entrepreneurs’ experiences and proposals, resulting in specific recommendations submitted to relevant ministries and agencies.
Other key implementation initiatives include:
- Strengthening NBR oversight to fast-track and simplify the sample release process.
- Bangladesh Bank’s policy adjustments to provide benefits similar to those for the IT sector for entrepreneurs receiving payments via digital wallets.
- Directives to SSL Commerce and relevant banks to ensure the swift deposit of online sales revenue into entrepreneurs’ accounts.
Commenting on the reform efforts, Lutfey Siddiqi said: “A core objective of the reform is to increase the dynamism in the economy. Collectively, the SME sector makes a vast contribution to our economy, though its voice is not heard as strongly as some large businesses.”
He added: “We must help these entrepreneurs increase their momentum and make every stage of their business easier—from financing to payment and supply chain. The government must be an enabler, not an obstacle.”
