1.

Introduction
Small and medium-sized enterprises are said to be responsible for driving innovation and
competition in many economic sectors. Small enterprises outnumber large companies by a wide
margin and also employ many more people. SMEs; sometimes also called “small and medium
enterprises” or “small and medium-sized businesses” (SMBs) are businesses whose personnel
numbers fall below certain limits. Small and medium sized enterprises (SMEs) are playing
increasingly important role as engines of economic growth in many countries including ours.
SMEs provide low cost employment opportunities and render flexibility to the economy. Many
of the SMEs are engaged in export activities suggesting that they are internationally competitive.
Considering the importance of SME sector in the economy of Bangladesh and understanding the
constraints under which such enterprises operate, it is evident that policies to support the
development and growth of SMEs are necessary. In the policy strategies, smooth and sustainable
development of SMEs all over the country will be considered as one of the vehicles for poverty
alleviation, and generation of more employment. An attempt has been made in this paper to
identify major financing constraints faced by SMEs in Bangladesh and suggest some policy
measures to overcome those constraints.

In our country vegetable vendors are accounted as small and micro enterprise or SME unit. These
vendors are mostly literate but maximum are poor. In most of the case they do not have any
professional training and they are migrating to Dhaka for their livelihood and to emerge from
poverty. This occupation does not make their life economically sufficient in long run. On the other
hand, the contribution of this sector in generating income and employment has not been
sufficiently appreciated. This study tries to find out regional concentration vegetable vendors.
This study also tries to find out the working capital intensity over monthly average income of SME
business unit (vegetable vendors) in Bangladesh.

1.1. Objective of the Study

1.1.1. Primary objective:
The primary objective of this report is to know the practical uses of statistical applications as well
as to get a practical knowledge of the study which can help to have a better knowledge of bookish
knowledge with the actual scenario.
1.1.2. Secondary objective:
Secondary objective of the report is to find out the impact of various aspects of an SME business
over monthly average income of SME business unit (Vegetable Vendors) in Bangladesh. This
report also expresses an overview of socio-economic status of the SME business units in
Bangladesh.

1.2. Methodology
Methodology is the process of collecting data and information, which are required in analyzing
and finding the best possible outcome. There are various approaches to collect data. This study
was based on primary data which were collected through field survey. On the basis of stratified
random sampling, 120 vegetable vendors were randomly selected and interviewed for detail
information regarding their financial condition and socio-economic conditions (details of
questionnaire in provided in appendix – 1). A set of detailed questionnaire was used to gather
information from the respondents. In this Survey, each group members collected information
from 20 vegetable business owners at their residential area wherein the sample size became 120.
This sample was used to understand the working capital intensity over monthly average income,
regional concentration and socio-economic status of SME business unit through different
statistical analysis along with interpretation with the help of Microsoft Excel and Statistical
Package for the Social Sciences (SPSS).

1.3. Limitations

 Lack of interest in most of the participants of the interview in answering the questions
 Inadequate disclosure of information from the respondents
 Lack of expertise and time in conducting one-to-one interviews with the respondents
essential for extraction of appropriate information
2. Graphical Presentation of Key Input Variables
2.1. Graphical Presentation of Daily Profit
2.1.1. Histogram
A histogram is a representation of tabulated frequencies, shown as adjacent rectangles, erected
over discrete intervals (bins), with an area equal to the frequency of the observations in the
interval.

Daily Profit
80% 71%
70%
60%
50%
40%
30%
20%
10% 7%
10% 6%
0% 2% 1% 2% 0% 1%
0%

Fig: Histogram of Daily Profits

The height of a rectangle is also equal to the frequency density of the interval, i.e., the frequency
divided by the width of the interval. The total area of the histogram is equal to the number of
data.

2.1.2. Frequency Polygon

Midpoints of the interval of corresponding rectangle in a histogram are joined together by
straight lines. It gives a polygon i.e. A figure with many angles. it is used when two or more sets
of data are to be illustrated on the same diagram such as death rates in smokers and nonsmokers,
birth and death rates of a population et One way to form a frequency polygon is to connect the
midpoints at the top of the bars of a histogram with line segments (or a smooth curve). Of course
the midpoints themselves could easily be plotted without the histogram and be joined by line
segments. Sometimes it is beneficial to show the histogram and frequency polygon together.
Unlike histograms, frequency polygons can be superimposed so as to compare several frequency
distributions.
 Daily Profit
80%
70% 71%
60%
50%
40%
30%
20%
10% 10% 7% 6%
0% 0% 2% 1% 2% 0% 1%

Fig: Frequency Polygon of Daily Profit

2.1.3. Cumulative Frequency Distribution

Cumulative frequency analysis is the analysis of the frequency of occurrence of values of a
phenomenon less than a reference value. The phenomenon may be time or space dependent.
Cumulative frequency is also called frequency of non-exceedance. Cumulative frequency analysis
is performed to obtain insight into how often a certain phenomenon (feature) is below a certain
value. This may help in describing or explaining a situation in which the phenomenon is involved,
or in planning interventions, for example in flood protection.

Daily Profit
120%
100% 96% 97% 99% 99% 100%
88% 90%
80% 81%
71%
60%
40%
20%
0% 0%

Fig: Cumulative Frequency Polygon of Daily Profit

2.1.4. Pie Chart
A pie chart (or a circle graph) is a circular chart divided into sectors, illustrating numerical
proportion. In a pie chart, the arc length of each sector (and consequently its central angle and
area), is proportional to the quantity it represents. While it is named for its resemblance to a pie
which has been sliced, there are variations on the way it can be presented. The earliest known
pie chart is generally credited to William Playfair's Statistical Breviary of 1801. Pie charts are very
widely used in the business world and the mass media. However, they have been criticized, and
many experts recommend avoiding them, pointing out that research has shown it is difficult to
compare different sections of a given pie chart, or to compare data across different pie charts.

1%
0%
Daily Profit
2% 1% 0%

2% 200-600
6%
600-1000
7% 1000-1400
1400-1800

10% 1800-2200
2200-2600
2600-3000

71% 3000-3400
3400-3800
3800-4200

Fig: Pie Chart of Daily Profit

2.2. Graphical Presentation of Number of Years Living in Dhaka:

2.2.1. Histogram:

Number of Years living in Dhaka

45%
40%
41%
35%
30%
25% 28%
20% %
15%
10% 14%
11%
5%
0% 2% 2%
0% 1%
1-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40

Fig: Histogram of Number of Years Living in Dhaka

2.2.2. Frequency Polygon:

45%
40%
35%
30%
25%
20%
15% %
10%
5%
0%
1-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40

Years Living in Dhaka

Fig: Frequency Polygon of Years Living in Dhaka

2.2.3. Cumulative Frequency Polygon:

 120.00%

100.00%

80.00%

60.00%

40.00%

20.00%

0.00%
1-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40

Years Living in Dhaka

Fig: Cumulative Frequency Polygon of Years Living in Dhaka

2.2.4. Pie Chart:

Years Living in Dhaka

2%
1% 0%

11% 1-5
2%
6-10
11-15
41%
15% 16-20
21-25
26-30
31-35

28% 36-40

Fig: Pie Chart of Years Living in Dhaka

2.3. Graphical Presentation of Daily Sales:

2.3.1. Histogram:

Daily Sales
70%
60%
50% 58%
40%
30%
20% 27%
10%
6% 5% 1% 0% 2% 1%
0%

Fig: Histogram of Daily Sales

2.3.2. Frequency Polygon:

70%
60%
50%
40%
30%
20%
10%
0%

Daily Sales

Fig: Frequency Polygon of Daily Sales

2.3.3. Cumulative Frequency Polygon:

 120%

100%

80%

60%

40%

20%

0%

Daily Sales

Fig: Cumulative Frequency Polygon of Daily Sales

2.3.4. Pie Chart:

1% 2% Daily Sales
0% 1%

5% 100-4000
6% 4100-8100
8100-12100
12100-16100
16100-20100
27%
58%
20100-24100
24100-28100
28100-30100
2.4. Graphical Presentation of Daily Rent:
2.4.1. Histogram:

Daily Rent
60.00%

50.00% 54.64%

40.00%

30.00%

20.00% 23.71%

10.00% 14.43%
3.09% 4.12%
0.00%
0-100 100-200 200-300 300-400 400-500

Fig: Histogram of Daily Rent

2.4.2. Frequency Polygon:

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
0-100 100-200 200-300 300-400 400-500
Daily Rent

Fig: Frequency Polygon of Daily Rent

2.4.3. Cumulative Frequency Polygon:

120.00%

100.00%

80.00%

60.00%

40.00%

20.00%

0.00%
0-100 100-200 200-300 300-400 400-500
Daily Rent

Fig: Cumulative Frequency Polygon of Daily Rent

2.4.4. Pie Chart:

Daily Rent

3%
4%

24%
14%
0-100
100-200
200-300
300-400
400-500

55%

Fig: Pie Chart of Daily Rent

2.5. Graphical Presentation of Average Monthly Profit:
2.5.1. Histogram:

Avg. Monthly Profit

60.00%

50.00%
51.00%
40.00%

30.00%

20.00%
18.00%
10.00%
10.00% 11.00% 5.00% 4.00% 1.00%
0.00%

Fig: Histogram of Avg. Monthly Profit

2.5.2. Frequency Polygon:

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

Avg. Monthly Profit

Fig: Frequency Polygon of Avg. Monthly Profit

2.5.3. Cumulative Frequency Polygon:

120%

100%

80%

60%

40%

20%

0%

Avg. Monthly Profit

Fig: Cumulative Frequency Polygon of Avg. Monthly Profit

2.5.4. Pie Chart:

Avg. Monthly Profit

1%

4% 10%
5%
1000-11000
11% 11000-21000
21000-31000
31000-41000

18% 41000-51000
51000-61000
51%
61000-71000

Fig: Pie Chart of Avg. Monthly Profit

2.6. Graphical Presentation of Literacy Profile of Vegetable Vendors:
2.6.1. Histogram:

Literacy
100%

80% 90%

60%

40%

20%
5% 0% 5% 0%
0%
Read only Write only Read & Write Illiterate Not Applicable
only

Fig: Histogram of Literacy

2.6.2. Frequency Polygon:

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Read only Write only Read & Write Illiterate Not Applicable
only
Literacy

Fig: Frequency Polygon of Literacy

2.6.3. Cumulative Frequency Polygon:

120%

100%

80%

60%

40%

20%

0%
Read only Write only Read & Write Illiterate Not Applicable
only
Literacy

Fig: Cumulative Frequency Polygon of Literacy

2.6.4. Pie Chart:

Literacy
0% 0%
5% 5%

Read only
Write only
Read & Write only
Illiterate
Not Applicable

90%

Fig: Pie Chart of Literacy

3. Regressions and Correlation Analysis of the Dataset
3.1. Regression
Regression analysis is a statistical process for estimating the relationships among variables. It
includes many techniques for modeling and analyzing several variables, when the focus is on the
relationship between a dependent variableand one or more independent variables. More
specifically, regression analysis helps one understand how the typical value of the dependent
variable changes when any one of the independent variables is varied, while the other
independent variables are held fixed. Most commonly, regression analysis estimates the
conditional expectation of the dependent variable given the independent variables – that is, the
average value of the dependent variable when the independent variables are fixed. Less
commonly, the focus is on a quantile, or other location parameter of the conditional distribution
of the dependent variable given the independent variables. In all cases, the estimation target is
a function of the independent variables called the regression function. In regression analysis, it
is also of interest to characterize the variation of the dependent variable around the regression
function, which can be described by a probability distribution.

3.2. Linear Correlation

In statistics, dependence refers to any statistical relationship between two random variables or
two sets of data. Correlation refers to any of a broad class of statistical relationships involving
dependence.
Familiar examples of dependent phenomena include the correlation between the physical
statures of parents and their offspring, and the correlation between the demand for a product
and its price. Correlations are useful because they can indicate a predictive relationship that can
be exploited in practice. For example, an electrical utility may produce less power on a mild day
based on the correlation between electricity demand and weather. In this example there is a
causal relationship, because extreme weather causes people to use more electricity for heating
or cooling; however, statistical dependence is not sufficient to demonstrate the presence of such
a causal relationship (i.e., correlation does not imply causation).
Formally, dependence refers to any situation in which random variables do not satisfy a
mathematical condition of probabilistic independence. In loose usage, correlation can 22 refer
to any departure of two or more random variables from independence, but technically it refers
to any of several more specialized types of relationship between mean values. There are several
correlation coefficients, often denoted ρ or r, measuring the degree of correlation. The
commonest of these is the Pearson correlation coefficient, which is sensitive only to a linear
relationship between two variables (which may exist even if one is a nonlinear function of the
other). Other correlation coefficients have been developed to be more robust than the Pearson
correlation – that is, more sensitive to nonlinear relationships. Mutual information can also be
applied to measure dependence between two variables.

3.3. Regression Analysis of Vegetable Vendors’ Avg. Monthly Profit:

A multiple regression was conducted by taking the average monthly profit as dependent
variable(DV) and several other variables as predictors or independent variable(IV). After several
trials of development and running, a satisfactory model was found with 3 predictors. The
particulars of the regression model are provided and discussed in detail below:

3.3.1. Descriptive Statistics:

3.3.2. Model Summary:

a. Predictors: (Constant), Daily rent for the van/shop, Yesterday's Total other expenses other
than rent for the van/shop, Yesterday's Profit
b. Dependent Variable: Average Monthly Profit

Interpretation: As shown in the above table, the adjusted R2 value of the model is 0.91, which is
quite satisfactory for any regression model. This value implies that 91% of the variations in the
DV are explained by the variations in the IV considered in the model. The difference between the
R2 and the adjusted R2 value is very small, only 0.002. This indicates that there is no redundant
independent variable (IV) incorporated in the model.
3.3.3. Analysis of Variance (ANOVA):

a. Dependent Variable: Average monthly profit

b. Predictors: (Constant), Daily rent for the van/shop, Yesterday's Total other expenses other
than rent for the van/shop, Yesterday's Profit

Interpretation: The key aspect to notice here is the F-statistic value and Significance (sig.) value
or the p-value. The null hypothesis here by default is that “the model has no explanatory power
for the average monthly profit”. Now this hypothesis is tested by checking the p-value of the
ANOVA test. The significant or p-value here is 0.000(up to three decimals), which is definitely
below the model significance level of 0.05. So, the null hypothesis is rejected which implies that
the model has explanatory power for the DV i.e. the average monthly profit.

3.3.4. Coefficients of Regression Equation:

Coefficientsa

a. Dependent Variable: Average Monthly Profit

Interpretation: The above table indicates that the daily rent for the van/shop has a positive
impact on the average monthly profit. A coefficient of 22.717 indicates that for every taka
increase in the daily rent, the average monthly profit will increase by tk. 22.717. This may appear
confusing. But this fact is quite normal given that bigger shops in a bazaar attracts more
customers which leads to more sales yielding more profit, and obviously bigger shops have
greater daily rents. The interpretations for the other two variables are however simple and
straightforward.
One important thing to notice here is the t-value and corresponding significant or p-value. In
case of individual predictors, the null hypothesis here by default is that “The co-efficient of the
variable in the regression equation is zero.” This can be tested by checking the corresponding p-
values. As seen from the table, the values for all three variables are below the model significance
level of 0.05. So, the null hypothesis is rejected for each of the variables. Hence, the regression
equation will be-
Y= -1891.536 + 22.717p -.906q +24.315s
Where, p= Daily Rent for the Van/Shop
q= Daily total other expenses other than the rent
s= Daily Profit

3.3.5. Correlation of Predictors:

Interpretation: As seen from the above table, Daily Profit and Daily Rent exert strong positive
correlation with Average Monthly Profit. Furthermore, Daily Rent and Yesterday’s Profit (or Daily
Profit) tend to have strong positive correlation between them.

**Special Note:
In the aforementioned model, only three variables are considered as predictors considering their
t-value and corresponding p-value. Incorporating other variables will increase the adjusted R2
value of the model slightly, but the t-values and p-values of the additional variables indicate that
they are redundant and have no effect in the prediction of the Dependent Variable (Average
monthly profit). This phenomenon is illustrated in Appendix-B in detail.
4. Conclusion:
The report is aimed towards unveiling the various aspects of socio-economic conditions of the
vegetable vendors- an important SME unit in our economy. Findings of the study reveal that
majority of the vegetable vendors have come from the rural poor society and poverty force them
to migrate to Dhaka. A shocking revelation is that majority of these vendors are literate, but
economically poor. It seems that their education had not been proven effectual in mitigating
their poverty, but self-employment had.
However, this profession does not make their life economically sufficient in long run, especially
in case of the future generations of the owners of this sector. In almost all the cases the children
of the owner are found to follow the same path, instead of educating themselves in the hope of
a better life. The reason behind this is the inability of the owners of the business to support their
children’s educational expenses. This is an alarming fact for our long-run economy. So,
government should take initiatives to improve the socio-economic condition of this sector and
contribute to the long-run welfare of our society.
 Appendix-A
Questionnaire for Exploratory Study on SMEs in
Bangladesh
 Appendix-B
Regression Analysis Considering Additional
Variables
B. Output of the Regression Analysis Considering Additional Variables:
B1. Descriptive Statistics:

Mean Std. Deviation N

Average monthly profit 28516.6667 25500.11809 120
No. of year in business
in the sector (owner 9.5896 6.98338 120
only)
Yesterday's total sales 5944.58 5563.593 120
Daily rent for the
144.7000 119.71518 120
van/shop
Yesterday's Total other
expenses other than 1383.0333 3426.04785 120
rent for the van/shop
Yesterday's Profit 1166.9583 966.92232 120
Working capital
required for running 7320.8333 8106.21606 120
the business
Current total amount
8578.3333 10262.61825 120
of capital invested
If yes, how much do
3986.6667 2884.73040 120
you pay as house rent?

B2. Model Summary:

Interpretation: It is evident from the above table that incorporating 5 additional variables in the
model increases the adjusted R2 value from .910 to .926. Standard error of estimate also tends
to decrease in that case.

B3. Analysis of Variance (ANOVA):

Interpretation: The high value of F-statistic and low p-value (=.000<0.05) indicates that the model
has high explanatory power for the average monthly profit.

B4. Correlation of Predictors:

Interpretation: Although the model summary indicated a higher R2 value for the model, the t-
statistic values and p-values of the 5 additional variables indicate that they are merely redundant.
For example, the p-value of “Current total amount of capital invested” is .734, which is much
higher than the 0.05 significance level value. So, the default null hypothesis (which is- “The
variable has a zero coefficient in the regression equation”) in this case is not rejected. Similar
interpretations can be made for the other 4 variables. Eliminating these variables from the model
provides a slightly lower R2 value, but is more credible in nature.