Problems and Prospects of MIS in Bangladesh- A perspective study on SME

Today it is widely recognized that information systems knowledge is essential for managers as most organizations need information systems to survive and prosper. An information system has many applications, MIS is one of them. Management information systems (MIS) is a specific category of information system that provides the required information to the management on a regular basis. It can be defined as collecting and processing of raw data into useful information and its dissemination to the user in the required format. In fact a full MIS includes all the systems that are designed to furnish management with information to assist in making decisions and to manage organizations efficiently and effectively.

In Bangladesh, the use of MIS in different organizations can be evidently found. However we will give our special focus on the small and medium enterprises. First of all, we need to know what is meant by an SME.

An SME is defined as, “A firm managed in a personalized way by its owners or partners, which has only a small share of its market and is not sufficiently large to have access to the stock exchange for raising capital”. SMEs ordinarily have few accesses to formal channels of finance and depend primarily upon savings of their owners, their families & friends. Consequently, most SMEs are sole proprietorships & partnerships.

SMEs can be defined against various criteria. The three parameters that are generally applied by the Government of Bangladesh to define SMEs are:
Capital investment in plant and machinery 
Number of workers employed 
Volume of production or turnover of business

Again, according to the industrial Policy 1999 (IP- 1999),
“Small Industries” are defined as industrial enterprises employing less than 50 workers and/or having a fixed capital investment of less than Tk.100 million.
“Medium industry” covers enterprises employing between 50 and 99 workers and/or having a fixed capital investment between Tk. 100 and 300 million.
“Cottage Industry” covers household-based industrial units operated mainly with family labour

SMEs are recognized as engines of economic growth and employment generation for sustainable industrialization in both developed and developing countries of the world. In context of Bangladesh, there is no alternative of small and medium enterprises for rapid industrialization and national economic growth through lower capital investment and employment generation. The commonly perceived merits often emphasized for their promotion especially in a developing country like Bangladesh include their relatively high labour intensity, dependence on indigenous skills and technology, contributions to entrepreneurship development and innovativeness and growth of industrial linkages.

The case for fostering SME growth in Bangladesh is irrefutable as these industries offer bright prospects for creating large-scale employment and income earning opportunities at relatively low cost for the un-and unemployed especially in the rural areas strengthening the efforts towards achieving high and sustained economic growth which are critically important prerequisites for triggering an exit from endemic poverty and socio-economic deprivation.

In Bangladesh about 90% of the manufacturing and service industries are fallen under SMEs category. SMEs account for about 45% of manufacturing value addition in Bangladesh. They account for about 80% of industrial employment, about 90% of total industrial units and about 25% of total labour force. Its total contribution to export earnings varies from 75- 80% based on the Economic Census 2001-2003 (The New Nation, 2008).

According to the Bangladesh Bureau of Statistics, SME's provide about 44 percent employment of the country. It contributes Tk 14,940 crore (149.40 billion) to the GDP during the fiscal year 2006-07.

In another statistics we find that the total number of SMEs is estimated at 79754 establishments, of which 93.6% are small and 6.4% are medium. The 2003 Private Sector Survey estimated that about 6 million micro, small, and medium enterprises defined as enterprises with fewer than 100 employees, contributed around 20-25% of GDP (The New Nation, 2008).

On the above statistics it is evident that the small business enterprises are very strong in terms of the number and their contributions, thus the overall development of Bangladesh’s SMEs are depending largely on the development of small scale enterprises. Higher growth of the SMEs can help eradicate poverty to a satisfactory level by removing various prejudices against labor intensive approach and creating jobs for the skilled manpower.