Corporate Connect for MSMEs: Panel Discussion

Rasel Rana
September 22, 2022
Corporate Connect for MSMEs: Panel Discussion

The Building Skills for Unemployed and Underemployed Labor” (B-SkillFUL) program is a Swisscontact project, funded by the Embassy of Switzerland in Bangladesh. LightCastle Partners, one of the Business Development Services (BDS) providers of the B-SkillFUL program, hosted a day-long Corporate Connect Event for MSMEs in Gulshan 1, Dhaka on the 7th of September, 2022. A panel discussion was organized for this event.

The principal objective of the discussion was to address the two of the most critical challenges faced by MSMEs when it comes to operations and propelling them towards success – access to finance and access to the market.

The panel discussion comprised key industry experts representing banking institutions, enterprises, and market access partners from the leather and furniture-making sectors. 

  1. Shawkat Hossain, Director, LightCastle Partners
  2. Samiul Anan, AVP, Head of CMSME, Bank Asia
  3. M G Shahnewaz, Vice President, Concord Ventures Limited
  4. Maksuda Khatun, Proprietor, Shabab Leather
  5. Faruk Hossain Lintu, Proprietor, Purewood furniture
  6. Rafid Fahmid, Consultant, Savoir

Ivdad Ahmed Khan Mojlish, Co-founder and Managing Director, LightCastle Partners, moderated the panel discussion. 

The panelists explored the challenges in access to finance and the market experienced by every MSME. However, the panel primarily focused on the furniture and leather product sector. Moreover, the discussion brought forward some recommendations to overcome the challenges. 

The edited highlights from the discussion showcase the key insights from the discussion.

Challenges Faced by MSMEs:

1. Access to market:

Ivdad Ahmed Khan Mojlish: “Maksuda Khatun, what is your experience working in the leather sector, and what are the challenges that you have to face?”

Maksuda Khatun: The challenges faced by MSMEs in this sector are manifold. But two of the key challenges are access to finance and access to the market. But I am grateful to the B-SkillFUL team because they have given me immense support in both aspects. I have already been able to secure three orders through the B-SkillFUL program’s intervention activities. Apart from that, I have gotten a lot of support from other stakeholders in this sector. As such, I feel immensely grateful to every single one of them.

Another challenge that I am facing currently is because of the recent price hike. The price of my input material has increased. As a result, I have to increase the price of my products as well. This has cost me to lose a few of my clients but my hands are tied at this point.”

Maksuda Khatun, Proprietor of Shabab Leather speaking at the Panel Discussion
Maksuda Khatun, Proprietor of Shabab Leather speaking at the Panel Discussion

Ivdad Ahmed Khan Mojlish: “Do you export your products or are there any plans for a product export in the future?”

Maksuda Khatun: “I have already been involved in the export market. One thing I can attest to is the fact that I never compromise my product’s quality.” 

M G Shahnewaz, Vice President of Concord Ventures Limited, speaking at the Panel Discussion
M G Shahnewaz, Vice President of Concord Ventures Limited, speaking at the Panel Discussion

Shahnewaz: “The biggest challenge faced by MSMEs in the export market is ensuring quality. There is a huge knowledge gap among entrepreneurs even though they are working in the sector for a long time. Other than that, MSMEs need to be mindful of bringing innovative products to the market. Buyers are always on the lookout for products that can stand out in the market.

In addition, considering the current climate change situation, a lot of focus is being given to biodegradable products. If MSMEs in the leather sector can focus on this aspect by producing 100% leather products or jute-based products, there is a huge market potential for them.” 

Ivdad Ahmed Khan Mojlish: “How did Savoir starts its journey and who are the primary target market you want to serve?”

Rafid Fahmid: Savoir’s journey started around 2 years ago. Despite the start of the journey is a smooth ride, we suddenly started facing bottlenecks in production. That is when we thought of creating a decentralized production line for Savoir.

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Through the B-SkillFUL program’s initiatives, LightCastle Partners connected us with Purewood Furniture. A furniture manufacturer from the Rangpur region of Bangladesh. By working with Purewood furniture, Savoir witnessed around 3x to 4x growth within a span of 3-4 weeks. It is an incredible achievement for the program and for us as well.” 

Providing market access to MSMEs in such remote locations is itself a big challenge. However, this has been made possible because of the successful intervention activities of the program. In this phase, LightCastle Partners onboarded 100 MSMEs from light engineering, furniture making, and the leather sector. Among these, Savoir worked with 3 MSMEs. When it comes to selecting the MSMEs, Savoir looked into key aspects – production efficiency and product quality.

Audience at the Corporate Connect Event for MSMEs Panel Discussion
Audience at the Corporate Connect Event for MSMEs Panel Discussion

2. Access to Finance:

Ivdad Ahmed Khan Mojlish: “What are the steps that can be taken on a firm level and policy level from the banks and other financial institutions to help MSMEs grow?”

Shawkat Hossain:  “The bottleneck that MSMEs face when accessing finance is mainly regarding the absence of proper documentation of their business operations and finances and the other is the lack of knowledge. On the contrary, banks want to associate themselves with good customers because, by sanctioning loans, they also ensure that they get interest payments from these loans. As such, there is a crucial bottleneck in the demand-supply of financing for MSMEs.

To tackle these issues, we need to build the capacity of the entrepreneurs regarding the banking and financing procedures. And also provide the knowledge of proper documentation of their business. If these issues are addressed, we can see significant growth in this sector.”

Shawkat Hossain, Director at LightCastle Partners, speaking at the Panel Discussion-Event for MSMEs-bangladesh lightcastle
Shawkat Hossain, Director at LightCastle Partners, speaking at the Panel Discussion

Ivdad Ahmed Khan Mojlish: “What are the banks doing to lessen the struggles of the MSMEs in getting financial support, especially in the post-Covid era?”

Samiul Anan: “There are indeed several Government funds that we have received for the stimulus package to disburse among MSMEs from different sectors to give them post-Covid support. However, when we went on to disburse those funds, the major issue was the lack of documents. It is a big hurdle for us because before sanctioning any loan, we need to do a proper background check of the entrepreneurs as per the policies set by the Bangladesh Bank. And the only credible way to do that is through verifying the documents.”

Faruk Hossain Lintu, Proprietor of Purewood Furniture, speaking at the Panel Discussion-Event for MSMEs-bangladesh lightcastle
Faruk Hossain Lintu, Proprietor of Purewood Furniture, speaking at the Panel Discussion

Ivdad Ahmed Khan Mojlish: “What is the condition of the MSMEs’ development from the furniture sector in the Rangpur region?”

Faruk Hossain Lintu: In the region that I come from, access to the market is a big obstacle for MSMEs. Also, the lack of knowledge about social media marketing has obstructed us to reach more customers. However, I am grateful for getting the skills development, access to the market and financial support through B-SkillFUL. I could connect with Daraz and Savoir as a market. Besides, they helped me develop my social media pages as well. So I am hopeful this will bring good results for our business.” 

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Future of the MSMEs in Bangladesh and recommendations to support their growth:

In the interest of the growth of the MSMEs and the economic progress of this country, we need to provide them with the necessary support. Besides, in the post-pandemic economy, the MSMEs need more support to sustain their businesses profitably. In this light, the panelists had some useful recommendations as a way forward for the ecosystem builders.

  • Capacity building of the MSMEs: MSMEs need training in regards to the proper documentation for their businesses. So that they can avail loans and financial assistance from the banks, financial institutions, and the government by utilizing them. 
  • Providing customized skills development and business development support for each MSME: One of the entrepreneurs pointed out the need for customized solutions for each MSME’s needs can create a bigger impact on their business.
  • Minimizing the information asymmetry between the MSMEs and the financial institutions: There is a significant information gap between the banks/ financial institutions and the MSMEs. This deprives them of various benefits that the banks are ready to provide.

Closing remarks:

The panel discussion ended with closing remarks from the panelists. Shawkat Hossain said, “ I would request the entrepreneurs to not wait till they are last hour to get loans from the banks. Because at that point you will not have much to show to the banks as evidence to support your claim that you will be able to pay them back. Without that assurance, banks will be reluctant to sanction the loan for you”  

A woman from the audience asking questions to the Panelist-Event for MSMEs bangladesh lightcastle
A woman from the audience asked questions to the Panelist

The panel conducted a question-answer session with the audience towards the end. A dynamic conversation took place where the industry experts answered the queries primarily about access to finance for MSMEs and the required documentation. 

WRITTEN BY: Rasel Rana

For further clarifications, contact here: [email protected]

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