Stakeholders push MSME reform ahead of LDC graduation

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Business leaders, government officials and development partners have called for sweeping regulatory reforms to reduce administrative burdens on micro, small and medium enterprises (MSMEs), saying business formalisation is vital for Bangladesh's smooth transition from Least Developed Country (LDC) status.

The call came at a stakeholder consultation jointly organised by Business Initiative Leading Development (BUILD), the Ministry of Industries and the International Labour Organization (ILO) in Dhaka.

Industries Secretary Abdun Naser Khan said simplifying regulations is essential to accelerate enterprise formalisation and support SMEs. He said a high-level committee has already been formed to speed up regulatory reforms and expressed hope that businesses would benefit from simplified procedures soon.

BUILD Chairperson Abul Kasem Khan said the organisation's newly launched business licensing guidebooks would help investors better understand licensing requirements. He also proposed a unified utility connection system, joint inspections and legally enforceable Service Level Agreements (SLAs) to reduce delays in government services.

Presenting the keynote paper, BUILD Chief Executive Officer Ferdaus Ara Begum said excessive regulations continue to increase business costs. Citing Bangladesh Bureau of Statistics data, she said around 65 percent of economic units remain informal and highlighted lengthy licensing processes that require dozens of permits, hundreds of documents and processing periods extending up to 650 days for some businesses.

To address these challenges, BUILD proposed introducing a Single Digital Business Identity Number, a One Stop Licensing Platform and multi-year licence validity, which it said could reduce compliance costs by 30 to 50 percent.

ILO representative Peter Jr. Bellen said eight out of every 10 workers in Bangladesh are employed in the informal economy, stressing the importance of transitioning workers into formal employment as the country prepares for LDC graduation.

During the discussion, government officials highlighted ongoing efforts to simplify company registration, digitise regulatory processes and improve the trade licence system. Business representatives also called for time-bound deregulation, easier access to finance for SMEs, simplified tax and licensing procedures, and stronger public-private collaboration to remove regulatory bottlenecks.

The Ministry of Industries said follow-up meetings would be held to turn the consultation's recommendations into concrete policy actions.