The interim government's new SME reform package, though well intentioned, misunderstands the challenges facing genuine small businesses. One of the measures removes the rule requiring entrepreneurs to keep 10 percent of export proceeds in banks. While this may ease cash flow for established exporters, it obscures the reality for small businesses such as street-side artisans, tech startup founders and women running food processing units from home.
Recent Bangladesh Bank measures reflect this misdirection. Importers can now make advance payments of up to $20,000 without guarantees, up from $10,000, while Exporters Retention Quota limits increased from $25,000 to $50,000. These changes benefit firms already engaged in significant cross-border trade, not the millions of micro-enterprises struggling with basic operations. For genuine small entrepreneurs, who represent 11.8 million SMEs, the main barriers remain regulatory hurdles at every stage, including complex registration processes, limited digital payment access, weak marketing capacity and disconnection from innovation networks.
The proposed reforms reflect 20th-century thinking for 21st-century challenges. While regional competitors invest in digital transformation and green manufacturing, Bangladesh policy remains focused on adjusting financial limits. This incremental approach overlooks three major shifts reshaping global business: the digital marketplace, the green transition and artificial intelligence. International markets increasingly demand digital skills and sustainable practices, requirements the current reforms ignore.
Consider digital transformation. The ability of an SME to sell on Amazon, manage supply chains on cloud platforms and accept mobile payments matters more than its advance payment ceiling. The government's planned digital portal risks becoming another online version of the existing bureaucracy, as seen in previous attempts at e-governance.
The green transition is now a trade necessity. European markets are introducing carbon border taxes, and global consumers expect sustainable sourcing. Bangladesh is behind in developing product passports. A reform package that does not include green certification and climate resilience undermines future export prospects.
Artificial intelligence is no longer futuristic. It is already used for inventory management, customer service and market prediction. Ignoring AI adoption risks leaving SMEs competing with outdated tools in an Industry 4.0 world.
What is needed is a bolder vision, such as the proposed Bangladesh 2.0 or a real smart framework. This kind of strategy would replace fragmented financial adjustments with systematic capacity building. Instead of only increasing payment limits for existing traders, it could introduce an SME growth fund to support digital marketing, digital payment integration and legal aid for business registration.
The framework could introduce a true single submission system to end registration delays by sharing data across government agencies. It could launch "AI for All" vouchers to widen access to artificial intelligence tools. It could also create Green SME Certification with tax incentives and procurement preferences to prepare businesses for environmental standards.
The choice is clear. Bangladesh can continue minor adjustments that benefit established enterprises, or it can support a real revolution that empowers small businesses. It can maintain a system that keeps grassroots entrepreneurs invisible or build an ecosystem that helps them compete globally.
The government's proposals represent incremental thinking when a transformative vision is needed. Adjusting financial limits while overlooking digitalisation, sustainability, and technological disruption is like rearranging deck chairs on the Titanic. Bangladesh's entrepreneurial spirit deserves more than survival. It deserves momentum. For the sake of 80 per cent of the industrial workforce and the country's economic future, a complete rethinking of SME policy is essential. The revolution cannot wait.
The writer is coordinator of Ella Alliance and founder of Ella Pad