IndexAbstractIntroductionLiterature ReviewPolicies and Strategies of SMEs in BangladeshData Analysis and FindingsConclusionAbstractSmall and medium enterprises (SMEs) play an increasingly important role as drivers of economic growth in many countries, including Bangladesh. SMEs offer low-cost employment opportunities and provide flexibility to the economy. Small and medium-sized enterprises (SMEs) play an indispensable role in overall economic development. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Since this sector is labor intensive in a short period of time, it is capable of increasing national income and generating employment quickly; achieve the Millennium Development Goals (MDGs), in particular the eradication of extreme poverty and hunger, gender equality and the empowerment of women. The SME sector has played a vital role in the economic development of some prosperous countries in Asia, in the national economy of Bangladesh. SMEs play a major role by creating industrial enterprises, providing jobs for industrial workers and contributing to more than a third of industrial value. added to the gross domestic product (GDP) and adapt quickly to changes in the market situation, generate employment, help diversify economic activities and also make a significant contribution to exports and trade. The economic efficiency and overall performance of SMEs depends to a large extent on the political context and the specific promotion policies pursued for their benefit. Therefore, policies and initiatives to develop SMEs and increase their competitiveness are a priority for Bangladesh. IntroductionSmall and medium-sized enterprises (SMEs) play an increasingly important role as drivers of economic growth in many countries. The structural arrangements of Bangladesh industries show specialized textile industries, manual welding, food processing and food linking industries, leather goods, ceramics, light engineering including automobiles, basic metal engineering, small scale chemical engineering, rubber industries, paper printing and publishing industries, small manufacturing industry, batteries, electricity, electronics, handicrafts, agricultural industries, jute multilateral products, silk industries, fruit processing, poultry farming, fishing, tea cultivation and processing, vegetable seed cultivation and printing industries, construction industries, transportation (including automobiles), film and photography, pathological laboratories, cold storage, furniture, fast food, frozen food, etc., in the service sector, and many other sectors are included in SMEs. But there are 11 SME focus sectors in Industrial Policy 2005 which are Electronics & Electrical, Software Development, Light Engineering & Metalworking, Agricultural Processing/Agri-Food/Plantation Agriculture Specialist, Agriculture/Textile Culture and Related Activities, Processing of leather and leather goods, knitwear and ready-made garments, plastics and other synthetics, healthcare and diagnostics, pharmaceuticals/cosmetics/toiletries and personal effects, clothing and consumer items rich in fashion items. Regarding the SME sector of Bangladesh, foreign and domestic experts have undertaken some studies. The Small and Medium Enterprise Foundation, IFC, Dhaka, Bangladesh says that the issue in question is spreading from micro to small and medium enterprises. Literature review methodology: The study is mainly based on secondary data. The data iswere collected from various published materials such as publications of Bangladesh Bank, Ministry of Industry, various SME policies of South Asian countries and relevant writings of some scholars. To conduct our research we carried out both exploratory and descriptive research. We conducted exploratory research because we need to obtain information to conduct our research. We also conducted descriptive research to analyze the policies and recommend some suggestions for the improvement of SMEs in Bangladesh. 2 Population size: all South Asian countries. Non-manufacturing activities (such as trade or other services): Non-manufacturing activities can be divided into two categories; Small Business: A business should be considered small if it has fewer than 25 employees, in full-time equivalents. Medium Business: A business should be considered medium if it has between 25 and 50 employees. (Source: Saha Summon, 2012 “A Comprehensive Study on SMEs of Bangladesh: Constraints and Prospects”) SME Policies and Strategies in South Asian Countries: SMEs are the backbone of South Asian economies, have emerged as the driving force of growth, to increase production, exports and employment, and therefore income generation. These countries implement their SME development strategy, typically in the following six key areas: business environment; entrepreneurship; access to finance; innovation and technology; business development strategy and market entry strategy. It aims to serve as training for entrepreneurs and trainers as well as Chambers of Commerce and Industry, for capacity building of SMEs. SME Policies and Strategies in Bangladesh A policy is a set of principles or rules that guide decisions intended to achieve rational outcomes. So any government policy should be respected by all government ministries and agencies. Otherwise the rational result may not be achieved. The government adopted a separate policy for small and medium enterprises (SMEs) in 2005. The government's policy with respect to SMEs has been detailed in the policy document entitled “Policy strategies for the development of small and medium enterprises (SMEs), 2005. The 2005 SME Policy Strategies identified 11 sectors to promote. This gives special emphasis to the development of small and medium enterprises (SMEs) as a push sector for balanced and sustainable industrial development in the country with the vision of addressing the challenges of free market economy and globalization through donor financial resources put available specifically to assist with the implementation of the SME policy set out herein would only be awarded to competitively selected businesses within the stimulus industries prescribed herein. Of the total resources available, no more than 20% can be allocated to medium-sized enterprises, while the rest, 80%, will be allocated to small enterprises. The Ministry of Industry and the SME Advisory Group/Foundation, as appropriate, will determine the modalities of implementation of both the credit fund and the venture capital fund. Within the Advisory Board, projects to be financed by the venture capital fund will be evaluated by a team of experts that will be established as part of the implementation of the SME policy. The SME Development Policy Strategy 2005 has contributed greatly to the development of SMEs in Bangladesh. The contribution of the industrial sector to the GDP (gross domestic product) increased from 15.76% in 2001-2002 to 19.01% in 2011-2012. The salient parts of the policy are: The overall objectives of the policy will be: · Accepting SMEs as indispensable actors in accelerating growth andpoverty reduction, worthy of their great potential and commitment to the formulation and execution of the necessary overall policy; political strategies must be integrated, in a broad and integrated way; Encourage and induce private sector development and promote the growth of foreign direct investment, develop a code of ethics and establish good governance, ICT-based knowledge management and customer supremacy in markets; Identify and establish an adequate physical and ICT network of institutional infrastructure and mechanisms that facilitate the promotion of SMEs; Reorient the existing fiscal and regulatory framework and government support institutions towards facilitating the achievement of SME policy objectives; Cultivate and collaborate with civil society institution(s) that have credible management in terms of providing necessary services, leadership, initiation, consultancy, mentoring and mentorship; etc; Create innovative but meritocratic arrangements so that deserving small businesses with a desired track record and/or entrepreneurial promise can be offered financial incentives within prescribed sectors on a well-agreed basis; Help implement dispute resolution procedures that proactively protect small businesses, especially from high costs and possible insidious harassment; take steps to create collateral-free debt mobilization avenues (using debt guarantee schemes or transforming intellectual property capital into pseudo-venture capital) in order to assist small businesses in addressing their pervasive lack of access to financing; systematically give priority to small and medium-sized enterprises, within the limits of government resources. Leverage information and communications technologies, Internet Protocol (IP)-based infrastructure, and electronic governance in an effort to leverage regulatory services, all types of useful information and mentoring inputs, with an emphasis on increasing profitability of SMEs in all sectors of the economy. Data Analysis and Results The contribution of SMEs to the total economy varies from country to country. SMEs in Bangladesh contribute 20-25% to the total GDP, while in India 80% of the GDP comes from SMEs. In Pakistan only 15% of GDP comes from SMEs. 80% of the total businesses in Bangladesh are SMEs. 97. 60% of the total enterprises are SMEs, while in Pakistan SMEs represent only 60% of the total enterprises. Workforce Employed in SMEs: Bangladesh employs 40% of its workforce in SMEs. Pakistan employs 80% of its workforce in SMEs, while in India the figure is 40%. Credit Limit: In Bangladesh priority is given to small entrepreneurs like SMEs. For small entrepreneurs the credit limit will be between Tk. 500000 to Tk. 5000000. In India, bank loans up to Rs. 5 crores per borrower/unit is given to SMEs. In Bhutan, only 48 entrepreneurs (less than 20% of the 258 Global Entrepreneurship course graduates) have received a loan, of which only 25 are currently running their own businesses successfully. Tax Rate: In Pakistan, high tax rates are one of the main reasons why businesses slide into the informal economy. According to research, 67% of businesses believe that tax regulations are the most problematic. The Government of Sri Lanka has given tax exemption for certain SME sectors with a minimum of 25 million. Here the tax rate is 12%. In India, the credit guarantee fund covers up to 85% of the loan if the creditor fails to repay the loan. The Royal Government of Bhutan and two financial institutions have created credit guarantee schemes to provide loans to.