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| The Accounting, Financial Advisory, and Taxation Services Market in Bangladesh, Katalyst, 2004 |
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| Country(ies) | Bangladesh |
| Implementing agency(ies) | GTZ, Swisscontact (SC) |
| Funding agency(ies) | Department for International Development (DFID), SDC, Sida |
| Date completed | October 2004 |
| Geographic setting(s) | Urban |
| Issues/challenges | cross-sector services |
| Contact person(s) | Mr. Manish Pandey |
| Web site | KATALYST website |
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Description
While the majority of SMEs in Bangladesh consider production and marketing to be the most important business functions, effective financial management is essential for enterprise growth. Outsourcing AFT services as a long-term solution or to improve staff capacity can help entrepreneurs improve financial management; expand and develop the business; and increase competitiveness.
To understand the AFT sector and pinpoint constraints to and opportunities for growth, KATALYST assessed the market in three cities by conducting:
- An exploration of the business service market to confirm AFT as a sector for development;
- A rapid market appraisal to gain an overview of the business service markets and gather information to support focus group discussions and an SME survey;
- FGDs with small groups of SMEs on various AFT services to understand their awareness, understanding, attitudes, usage, and satisfaction with services;
- A survey of 580 SMEs to get a statistically significant picture of key AFT service markets and pinpoint critical constraints and opportunities; and
- In-depth interviews with a range of 120 AFT service providers to understand the supply side of the AFT market.
This report details the process KATALYST used to analyze the market assessment information; consolidate the analysis; and choose and design interventions to develop the AFT sector. In addition, reports are available on each component of the market assessment with the final two reports containing an extensive analysis of the information gathered and recommendations for program interventions to develop AFT service markets.
Note that this is a working document that is updated regularly.
Methods for info gathering
Secondary source research, key informant interviews, SME survey, Provider interviews, In-depth interviews, Focus group discussions, qualitative, quantitative
Summary of results
The study found 6 main services with differing market penetration and market characteristics - auditing, accounting, tax and financial consulting, and AFT training and software. Tax consulting has the greatest market penetration (64%) and auditing the highest percentage of consumption in monetary terms(51%). The market is growing at approximately 14% per year. The service areas with the greatest potential for growth appear to be tax and financial consultancy and AFT software.
SME demand for AFT services is characterized by a narrow focus on tax reduction or getting a loan. Although SMEs are aware of AFT services, they do not fully understand the impact such services can have on business performance. SMEs are concerned about the confidentiality of their business information and often distrust the service providers, becoming frustrated when they are less than transparent or do not deliver what they promise.
Though there is wide range of AFT service suppliers, the market is dominated by income tax practitioners. As a group, they can be characterized as pessimistic and not very dynamic. They do not actively diversify into new products and markets and there is considerable dissatisfaction with the legal and regulatory environment. The frustration level with customers suggests a disconnect between the expectations of suppliers and consumers and the supplier view of the sector’s professional associations highlight their inability to work together towards common goals and to respect competition in the marketplace.
Services
Accounting, Advisory and Consulting Services, Auditing, Bookkeeping, Business Information, Financial Consulting, Information Technology (IT), Management Information System Software, Tax Services
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| Associated Activities and Documents |
| Market Assessment |
| » | Swisscontact & ORG-MARG Quest, Bangladesh 2001 (Is related to)
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| » | Pond Fishery Subsector Service Market Assessments, Bangladesh, IDE & KATALYST 2003 (Is related to)
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| » | Vegetable Subsector Service Market Assessments, Bangladesh, IDE & KATALYST 2003 (Is related to)
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| » | Assessing Supply of and Demand for Quality Management Services in Bangladesh, Katalyst, 2004 (Is related to)
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| Project Design |
| » | Katalyst in Bangladesh, by Frank Matsaert, 2003 (Is related to)
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| » | Design of the Katalyst project, Bangladesh, June 2004 (Is related to)
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| Implementation |
| » | Swisscontact Bangladesh - BDS Seminar presentation, 2002 (Is related to)
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| » | KATALYST - Implementation, Bangladesh 2002-2007 (Is related to)
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| Global documents |
| » | Fifth Annual Service Markets Seminar, Chiang Mai, Thailand, September 2004 (Is related to)
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