Impact of COVID-19 on SMEs of Bangladesh: How Well have they Coped with the Situation?

Abstract

Like all other sectors of the economy, the halt in economic activities due to the outbreak of COVID-19 in Bangladesh has adversely affected SMEs. Despite constituting over 90 percent of business enterprises in the country, this sector has not grown enough due to a variety of reasons. Coupled with these, the pandemic has had a major effect on the operation of SMEs. Using a descriptive analysis method, this study tries to find the effect on enterprises, the way they have tried to cope with the situation, and the extent to which they have recovered from the phase. While the Government announced stimulus packages in different rounds, the study has found that commercial banks' perception and reluctant attitude towards small and medium entrepreneurs worked as the main reason behind enterprises' failure to receive the money. The study argues that the SME Foundation of Bangladesh needs to play a proactive role in minimizing the gap between the enterprises and banks, and a separate state-owned bank needs to be determined through further research and analysis.