To know Entrepreneurship Environment in Bangladesh: The Prime Minister recently called upon Vietnamese entrepreneurs to invest the country

promising conducive facilities. We laud her for her efforts to woo-much needed foreign investment. Besides, there are major bottlenecks in the entrepreneurship environment. Certain industries are very much viable in Bangladesh. The Garments, textiles and shoe industry show a lot of promise. Indeed several joint-venture shoe companies have already opened up shop in Bangladesh. More investment is in this pipeline. This has been possible because these factories by nature less energy-intensive. The second reason for Bangladesh to be the choice destination for shoe industry is that our good quality leather is cheap. Leather available in Bangladesh, available at competitive prices. Another resource is abundant supply is Bangladeshs young labor force. Compared to Asean, our labor force has two distinct advantages. First, Bangladesh workers are disciplined and second their eagerness to learn is translated into higher productivity. According to a recent interview of the current President of Foreign International Chamber of Commerce and Industry, Syed Ershad Ahmed, new investment shows a decline. Yet at the same time, re-investment and modernization of existing industry is on the rise. From what has been published in the latest edition, ease of doing business index brought out by the World Bank and IFC, access to electricity has been touted as a major hurdle. Next in line comes to poor communication. Dhaka- Chittagong highway to 4- lane from present 2- lane causes terribly long tail- back. The chronic and traffic jam on highways has been singled out as the biggest problem for doing business in the country, considered a more acute problem than political unrest. The problems were highlighted in an interview by BBCS Kadir Kollol of a Pakistani entrepreneur who set up a Garments unit in Ashulia industrial belt. He was attracted by availability of cheap, disciplined labor-force and duty-free access to the European market. What sets apart this factory from the hundreds of others is that workers get payment on time. The friendly environment for workers coupled with timely payment of wages that are a notch above the common local industry standard. The entrepreneur is happy since his investment has not suffered any incidence of labor unrest. Interestingly, trade unions in the area, traditionally leftleaning and generally anti- foreign investment are not averse to a Pakistani owned Garments

industry operating there, since basic workers rights are looked after. Mr. Moghuls greatest concerns are neither political instability nor agitating workers. Rather they revolve around poor communication. Rather, they revolve around poor communication which, result in lost time, and the dire straits of energy for industry, i.e. supply of gas and electricity (load shedding and low voltage). The erratic supply of these two essential prerequisites of production automatically translates into loss of productivity on the one hand and a higher cost of production on the other. Since, diesel- run generators come into play to keep production lines running. SMEs and Its Related Constraints: In Bangladesh, SMEs including micro enterprises comprise over 99 per cent of all industrial units, contributing over 85 per cent of industrial employment. SMEs are heterogeneous by their characteristics, mode of operation and types of SME products and processes. However, some of the constraints are discussed below: Lack of Investment Finance and Working Capital Finance: Banks in general do not consider SME financing as profitable activity. SMEs are also regarded high risk borrowers because of their low capitalization, insufficient assets, and high mortality rates, and consequently banks are not keen to offer them credit at comparable interest rates. SMSs in the export sector also face problems of access to working capital. Enabling Environment for Trade and Business: Developed transport and communications infrastructure, congenial tax regime is vital for SME development. Bangladesh has made some progress in this direction but it still falls short of present day needs. Other constraints of a general nature are insufficient infrastructure support especially power, widespread tariff anomalies, low productivity of labor, low level of technology, lack of research and development and low level of education of SMEs entrepreneurs in general.

Barriers in access to finance for women entrepreneurs Discrimination still exists regarding access to finance by women entrepreneurs. Studies on the subject noted that women contribute around 26 per cent in total deposit of the banking system but their access to credit is below 2 per cent of the total outstanding loans. This is an unfortunate situation. Access to finance is one of the most critical constraints faced by the women entrepreneurs. Although most of the banks have SME banking, few women apply for the bank loans as they need to submit a number of statements such as bank statement of the enterprise, reference of the guarantor etc. Problems were more pronounced for women entrepreneurs in the informal sector. A recent study noted that about 79 per cent of women entrepreneurs in this sector had no access to formal financial institutions and depended on own savings and family as a source of capital to start a business. (Chowdhury, Farzana, 2008). Banks usually consider women entrepreneurs in SME to be high- risk borrowers. The kind of collateral usually considered by banks as appropriate security is land and building. Women usually lack ownership of land and hence the collateral requirement of land and building is a constraint for them to access institutional finance. Although women have proved their repayment performance of 90 percent in the field of micro credit, commercial banks perceive them to be of high risk. Most of the small women entrepreneurs do not have a credit history. These barriers induce female entrepreneurs to take recourse to informal sources of finance, which has a negative impact on their growth potential. Inability to Market SME Product The present and future growth prospect of any product depends to a large extent upon marketing activity. This requires having a well-planned marketing strategy including advertisement campaign as well as resources for implementing that strategy. Unfortunately, SME entrepreneurs are at the bitter end in this respect as they cannot make adequate investments in Marketing and also lack necessary marketing skills.

Inability to Maintain Product Quality A major constraint to the sustainability of SME growth in Bangladesh is the inability to maintain the quality of SME products. Due to poor quality, these products cannot stand competition from imported products. Its a challenge for SME sector survive competition from its rivals. Lack of Skilled Technicians and Workers Lack of skilled manpower is a perennial problem in Bangladesh. The problem is particularly acute for small and medium scale export oriented enterprises. Poor Management Skills of Entrepreneurs In the modern day economy, managerial skills for undertaking planning, marketing, and cash flow management are vital for survival of an industry, small or large. SME entrepreneurs in Bangladesh are very much lacking in managerial skills and are not used to strategic planning. It is natural that they are unable to survive market failures.