Small enterprise in Dhaka: obstacles and support service status

Abstract

Small enterprises are the core of industrial sector in Bangladesh. This study aims at identifying the key factors that creates obstacles for small industry in Dhaka. Other purposes of this study are to understand the need for support service, to find out the awareness level and the status of the assisted firms. This study includes the face to face interview of 330 small enterprises from different parts of Dhaka city. Both assisted and unassisted firms were there. Factor analysis (Principal Component Analysis)has been carried out by taking twelve variables and the result indicates that three factors are creating obstacles for the small enterprises. These are Business Support Factor, Policy & Regulatory Factor, and Production & Competition Factor. The Business Support Factor explains 18.5 percent variance and these three factors collectively explain about 50 percent variance. Among the respondents 60% are aware about the SME support services but only 30 are getting any kind of assistance. Mainly they were getting financial supports from different organizations. Financial, marketing and networking and technological support are the most needed services. Though different organizations were working for small enterprises, a gap still remains between the need of the business and the availability of facilities. By adding different dimensions in support services and by taking proactive initiative, this gap can be reduced.