In our country startups are doing relatively well but the success rate is not quite satisfactory because of various problems including regulatory issues like lack of access to finance, age-old valuation process, lack of private equity and incubation, speakers told at a seminar on “Journey of CMSMEs from startup to scale up: prospects & challenges” organized by Dhaka Chamber of Commerce & Industry (DCCI) on 29 October 2022.
DCCI President Rizwan Rahman said startups can be a great economic enabler for Bangladesh. A start-up friendly ecosystem in the country has not been substantially equipped, he added. In the Global Startup Ecosystem Index 2022 Bangladesh ranks 93 out of 100 countries. The Startup index also claimed that financing and dearth of policy support are root causes of weak startup growth in developing economies including Bangladesh, he mentioned. He also told that Bangladesh currently has over 1200 active startups and around 200 new startups join the industry every year which made around $800 million investment and 1.5 million formal and informal jobs in the last decade. Government has meanwhile taken various initiatives to strengthen startup ecosystem including establishing a venture capital firm, 28 high-tech parks, data centres as well draft rule for small-cap company 2022 by BSEC. Taking this urgency of smooth ecosystem into account, we need to create International standard startup incubation centres, startup pioneers, expert consultation, startup exhibition, networking, mentor development, low-cost financing options with necessary regulatory reforms including Industrial policy, Export policy, Fiscal policy, Foreign Exchange Regulation and SME policy and others.
Senior Secretary of the ICT Division Zeaul Alam PAA being the chief guest of the programme said that CMSMEs and startups directly or indirectly create a large number of employments. Though there is a remarkable failure rate in the startups but it is not making any loss rather it is learning for next efforts. Government is working hard to create a startup ecosystem in the country through various initiatives. Technical centres are being established in the Upazila level where startups will get space to work also in the hi-tech parks there will be ample opportunities for startups, he said. It is true that we have many challenges but we need to overcome. Government has taken an initiative of formulating a draft startup policy already. A payment gateway platform under the initiative of the government named “Binimoy” will be launched soon. Data protection is also an important element for an effective ecosystem of startups, he told.
Dr. Shaikh Shamsuddin Ahmed, Commissioner, BSEC was present as special guest. He said that in the recent industrial policy SME as well as startups got much priority. But we need to enhance the regulatory collaboration among all the agencies at the operational level. Based on the reality few changes are coming into effect but we need to improve the valuation system for the startups, he added. The more we are heading towards the fifth industrial revolution, the more we need an easy valuation process. We have established IT framework, now we need to implement. For that we the regulators need to be more assistive to the startups or to the new ventures. To mitigate financing problem; private equity, venture capital and angel investors can play a vital role if the risks can be rationalized in this sector, he said.
Ambareen Reza, CEO and Managing Director of Foodpanda Bangladesh Limited said the success stories will ensure trust and trust will facilitate others to come in this sector. For angels to grow, access to finance is a great challenge, she added. We need investment in the fintech and logistic area, she also told. Nirjhor Rahman, CEO, Bangladesh Angels said liquidity is the key thing in this sector. We have to ensure investment and working capital for new startups. Tanveer Rashid, Director of Finance, Chaldal Limited said that government’s Startup Bangladesh is good initiative. If the valuation process is simplified, more investment will come, he added. Because of risks of the startups, banks are reluctant to finance. Most of the startups make loses at the early stages and this is a barrier to get finance. He later requested the regulators to look into the matter.
Fahim Ahmed, CEO, Pathao presented the keynote paper. He said that Startups are enabling the digital transformation of Bangladesh. Startups are helping SMEs through creating market access, accelerating Fintech, adopting technology and enabling mobility. Regulatory framework, policies, limited human capital, technology, finance and accessing international market are some of the challenges for this sector.
Published on: 2022-10-29