Investor Presentaiton

IV.4 Financial System Financial sector is somewhat worsened after the pandemic - most of the indicators are showing lower score than year 2021 Overall level of performance of the financial sector has remained in the negative indicating a struggling situation as in previous years According the respondent, negative perception is observed in case of the soundness of banks (-0.09; 41.9%); accessing start-up capital (-1.34; 51.4%) and financial and auditing reporting standards (-0.32; 49.3%) 45.9% of businessmen indicated that SMEs are facing difficulty in obtaining funding from the financial sector (-0.27; 45.9%) and the progress is rather slow compared to other financial market indicators ■ ■ According to World Bank, there is a $2.8 billion investment deficit in the SME sector. Capping the interest rate is a major barrier for SMEs to avail necessary credit from the banks; government should withdraw interest rate cap on lending rates Further enhancement of credit support and innovating financial tools are needed for ensuring access to credit to SMES ■ The capital market has been struggling in building confidence among the investors Major challenges of the capital market include poor-quality IPOS (56.3%), weak regulatory enforcement role of SEC (53.1%), anomalies in financial reporting (50%) and suspicious trading in the secondary market (50%) ■ - Other issues include questionable role of institutional investors, lack of transparency in BO accounts, failure to ensure due diligence of DSE/CSE 34

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