TVET for Global Competitiveness Development of Microenterprise Sector in Bangladesh Mohammad Fazlul Kader Deputy Managing Director PKSF

Microenterprise No universally accepted definition of Microenterprise Any small household-based economic activity with the investment of small amount of capital is considered as microenterprise. Microenterprise is defined on the basis of the amount of investment and number of workers engaged in any economic activity.

Contributions of MEs In Bangladesh- Six million microenterprises created employment for more than 31 million people. ME sector is the source of 57 percent employment of the country. MEs’ contribution to GDP is 25%.

Around 1. 2 million microenterprises financed by PKSF generated 1 Around 1.2 million microenterprises financed by PKSF generated 1.6 million fulltime employments and 1.0 million part-time employments. The return on investment is higher in microenterprises than in small and large enterprises. The return on investment for micro, small and large enterprises is 83, 45 and 27 percent respectively.

MEs in the global context An overwhelming majority (92.7%) of the 22.3 million enterprises of European Union were microenterprises in 2012 (eurostat newsrelease Nov 2015). Micro-businesses represent 92 % of all business in the United States. Micro-businesses in the United States created 41.3 million jobs (Bigger than you think, Association for Enterprise Opportunity). Microenterprises in Japan account for 87% of total SMEs (Japan Small Business Research Institute 2013) .

Financial services for Microenterprises PKSF PKSF launched Microenterprise Program in 2001 An entrepreneur can take up to BDT 1.0 million for microenterprise Total number of micro-entrepreneurs 1.2 million. Current loan outstanding BDT 66,388.0 million.

Sector wise ME loan of PKSF

Average wages in ME sector: Average monthly income of a worker in typical microenterprises in processing sector is around BDT15,000 (USD 187) Whereas in Japan, monthly salary in processing unit is USD1000-USD1500.

MEs in low-level technology trap

Advanced technologies in MEs

Value Chain Interventions Value Chain Interventions made to untie knots in the value chains of different potential subsectors PKSF implemented VC interventions in different subsectors that have growth potentials

Sub-sectors Cow rearing Beef fattening Safe vegetable cultivation Sweet water mixed prawn culture High value flower cultivation Crab culture Seaweed production Mung bean Shawl production by using power looms Honey processing Automobile workshops Safe dry fish production Imitation gold jewelry

Technology transfer Proven technology should be transferred from both home and abroad for increasing productivity in ME sector. PKSF has taken initiative to introduce proven technologies in different potential subsectors. Crab hatchery technology has been transferred to the coastal Satkhira district from Vietnam.

Crab hatchery established to promote crab fattening subsector

High value fruit cultivation

Business clusters in Bangladesh PKSF identified 600 business clusters of different activities in different regions of the country. These cluster can be developed by providing financial services and non financial supports. Technical skill development, infrastructure development and market linkage supports are essential to promote these clusters.

Floriculture Business Cluster Gadkhali, Jessore

Beef fattening business cluster in Kustia

Shoe making business cluster in Bhairab

Mini garments business cluster in Munshiganj

Light engineering and automobile workshop business clusters in Dhaka and Jessore

Technological supports provided in different subsectors PKSF provides technological supports for promoting different subsectors through value chain subprojects

Technologies for safe vegetables

Introduction of Lilium Technologies for high value flower cultivation Introduction of Lilium Introduction of new varieties

Technologies for livestock development Mini veterinary lab Model Cowshed De-worming cows

Technology for Black Bengal Goat Rearing Perch (Macha) system of goat rearing

Technology for sweet water mixed prawn culture Prawn culture in Floodplains

Power loom technology for Shawl Production Introduction of Power Looms in Shawl production

Skill Development Workers of many potential subsectors need skill development training to enhance their capacity. PKSF provided trade based skill development training on- Cow rearing and beef fattening Fish culture Shoe making Tailoring and dress making Food processing Automobile engineering etc.

Skill development is required for many farm and non farm sub-sectors Livestock and poultry Fisheries Leather goods production Jute goods production Light engineering Textile and garments Electric and electronics etc.

Challenges of ME sector Access to finance Access to information Low level technology trap Infrastructure Marketing Branding of ME products Skill development Institutional Capacity Building

TVET Technical and Vocational Education and Training Most of the people employed in microenterprises do not have adequate skills on their respective business. Short or specially designed courses should be introduced to fulfil the demand of various promising subsectors like micro shoe industry, automobile engineering, weaving sectors etc.

Improvement of training methods TVET Improvement of training methods procuring training/advisory services by them have to be innovative to suit their ability to use such services. The job placement by establishing linkage between the training institutes and different manufacturing/processing microenterprises.

To strengthen TVET program Policy and investment supports from the government Increase number of TVET institutions Enhance capacity and quality of the TVET institutions

Training programs on business, production, personnel and marketing management Audio-visual techniques and ICT based distance learning system Performance based investment in TVET Institutions

Thank you