Bangladesh has successfully implemented various mechanisms to promote and support Small, Micro, and Medium Enterprises (SMEs), which have played a significant role in the country's economic growth and poverty reduction, which Nigeria could mimic and adapt to our peculiar economic situation.
Let me start by presenting an in-depth overview of the Bangladeshi SME model and the lessons that Nigeria can learn from the Bangladeshi initiatives, for consideration and implementation
Specialized Financial Institutions:
Bangladesh has established specialized financial institutions dedicated to SME financing. Which is similar to the defunct People’s Bank of Nigeria that was established by the Ibrahim Babangida regime, which was headed by the late Maria Shokenu as the Managing Director and the late Dr Tai Solarin as Chairman. The Bangladesh Small and Cottage Industries Corporation (BSCIC) and the SME Foundation are two prominent institutions that provide financial assistance, training, and technical support to SMEs. These institutions offer collateral-free loans, credit guarantees, and venture capital to address the funding gap that many SMEs in Nigeria face. Nigeria can learn from this approach by establishing similar institutions that focus on providing accessible and affordable financing options for SMEs.
Simplified Business Registration: Bangladesh has implemented policy reforms to simplify business registration processes and reduce bureaucratic hurdles for SMEs. The country introduced a "One-Stop Service" system, where entrepreneurs can complete all necessary registration procedures in a single location. This streamlined process has made it easier for SMEs to start and operate businesses. Nigeria can adopt a similar approach by simplifying its business registration procedures and reducing administrative burdens for SMEs. In order to achieve this, some of us analysts have advocated for the decentralization of the Corporate Affairs Commission to enable the 36 State governments to be able to register SMEs, with an integrated ICT with the Abuja central system.
Access to Credit: Bangladesh has taken steps to improve SMEs' access to credit by establishing credit information bureaus and promoting credit scoring systems. These initiatives have helped financial institutions assess the creditworthiness of SMEs more accurately, leading to increased lending to the sector. Nigeria can learn from this by implementing credit information systems and encouraging the use of credit scoring mechanisms to enhance SMEs' access to finance.
Skills Development and Entrepreneurship Training: Bangladesh has prioritized skills development and entrepreneurship training for SMEs. The country has established numerous training centers and vocational institutes that offer specialized courses and workshops to equip entrepreneurs with the necessary skills and knowledge to run successful businesses. Nigeria can replicate this approach by investing in vocational training programs and entrepreneurship development initiatives to enhance the capacity and competitiveness of its SME sector.
Export-Oriented Industrialization: Bangladesh has focused on developing specific sectors, such as garments and textiles, through export-oriented industrialization. The government has provided various incentives and support to SMEs operating in these sectors, leading to significant growth in export earnings. Nigeria can learn from this by identifying key sectors with export potential and providing targeted support to SMEs operating in those sectors to enhance their global competitiveness.
Public-Private Partnerships: Bangladesh has fostered strong public-private partnerships to support SME development. The government collaborates with industry associations, chambers of commerce, and private sector entities to design and implement policies and programs that benefit SMEs. Nigeria can adopt a similar approach by fostering collaboration between the government, private sector, and industry associations to create an enabling environment for SME successful development in Nigeria
Nigeria can look to Bangladesh as a model for Small and Medium Enterprises (SMEs) development. Bangladesh has made significant strides in promoting and supporting SMEs, which has contributed to its economic growth and poverty reduction.
Lastly, Nigeria can learn from Bangladesh's success in promoting SMEs through export-oriented industrialization. Bangladesh has focused on developing specific sectors, such as, shoe and leather ; while Nigeria should encourage and support shoe and leather products manufacturers in Aba, and other manufacturing hubs, exporters of sesame seeds, gum Arabic from the Western and Northern states of the country. By identifying and supporting key sectors with export potential, Nigeria can boost its SME sector and enhance its global competitiveness.
In conclusion, Bangladesh's SME model provides valuable lessons for Nigeria. By establishing specialized financial institutions, simplifying business registration processes, improving access to credit, investing in skills development, promoting export-oriented industrialization, and fostering public-private partnerships, Nigeria can create a conducive environment for SMEs to thrive, driving economic growth, job creation, and poverty reduction.