DHAKA (Reuters) - Bangladesh's small and medium enterprises (SMEs) can play a big role in pushing national economy up to the level required to achieve the millennium development goal of halving poverty over the next five years. But cheaper raw materials and inputs from India, China, Taiwan and others have held this vital growth sector back, said Aftab ul Islam, chair person of the SME Foundation. Bangladesh's economy, which grew by 5 to 6 percent on average since 1996, could see gross domestic products (GDP) rise between 8-10 percent by 2015, helped by the SMEs, he told Reuters in an interview on Sunday. Abject poverty now grips around 38 percent of the country's more than 150 million population, who live on less than $1 a day. The U.N. wants poverty halved by the end of 2015. "The Bangladesh economy is already enjoying benefit from strong support of its dependable SME sector. SME is the engine of growth in Bangladesh, that can also help the country become a middle-income state by 2021," said Aftab. There are about 6 million SMEs in Bangladesh, making up about 90 percent of all industrial units in the country, that employ about 31 million people and contribute around 25 percent of the GDP, Aftab said. "While large and heavy industries will be set up in the natural course, the exciting prospect as always lies with the SMEs," he added. "SMEs are labour-intensive and low-capital based. Thus encouraging individual entrepreneurs to invest, mainly in manufacturing products that appeal to the general public but are also significant contributors to backward linkage to heavy industries," said Aftab. About 60 to 65 percent of SMEs are located outside the metropolitan areas of Dhaka and Chittagong, having easy access to labour and less problematic business environment. Business costs in rural areas were also low, said the SME Foundation chief. "SME's contribution to national exports is significant through different industries such as ready-made garments, jute, and leather." In Bangladesh scarcity of raw materials hinder the ability of SME to be export oriented and limits its ability to reach more advanced stages of international business. Cheaper supply of goods and inputs from India, Taiwan, China, Thailand and Korea only add to the competition faced by the SMEs, which also suffer local constraints such as shortage of electricity, water, roads and highways. "If Bangladesh authorities focus more on the SMEs and support them by all means, the SMEs could become a lasting backbone of the nation's economy and help it achieve the vital MDG of halving poverty (by 2015)," Aftab said.