A recent survey by Policy Exchange Bangladesh has revealed significant obstacles faced by local businesses in Bangladesh when seeking loans from formal financial institutions. The findings were shared at a high-level roundtable held in Dhaka titled Unlocking Business Opportunities and Access to Finance: Insights from the Municipal Competitiveness Index (MCI).
The event, organised in collaboration with Swisscontact’s PRABRIDDHI project, highlighted the role of the MCI, Bangladesh’s first business environment index tailored for municipalities, in providing valuable insights into local economic conditions. Supported by the Bangladesh Investment Development Authority (Bida), the index aims to identify challenges and opportunities at the municipal level to foster private sector growth.
According to the survey, many small and medium-sized enterprises (SMEs) rely heavily on personal savings and have limited access to diversified financial products. Under the index’s “Economic Potential and Sectors” pillar, respondents indicated that securing loans remains a major hurdle, hampering business expansion and economic development.
Policy Exchange Bangladesh’s Chairman and CEO, Dr. M Masrur Reaz, and Senior Policy Analyst Md. Ziaur Rahman emphasised that the MCI provides evidence-based insights crucial for formulating effective local-level reforms. Bida Director General Jibon Krishna Saha Roy underscored the index’s importance as a data-driven tool for the Access to Finance programme, covering seven municipalities and offering a clearer understanding of local advantages, challenges, and opportunities.
During the event, Syed Abdul Momen, Additional Managing Director and Head of SME Banking at BRAC Bank, pointed out that many entrepreneurs lack basic knowledge about the loan application process, including documentation and procedural steps, which often results in delays and added burdens.
Swisscontact Bangladesh’s Country Director Helal Hussain noted that the MCI’s implementation aligns with global best practices, citing its successful use in countries like Honduras. He highlighted the index’s potential to inform policy measures aimed at reducing barriers and strengthening local business environments.
Nahin Ferdous, Senior Manager of Swisscontact’s Local Economic Development Project, presented strategies on how municipalities can bolster their economic base through improved financial access and targeted interventions.
The roundtable brought together government officials, banking representatives, development partners, and local business leaders to discuss ways to overcome the financing gap that constrains small business growth at the municipal level. The event was inaugurated by Markus Ehmann, Team Leader of Swisscontact’s LED Project, who emphasised the importance of data-driven policies in fostering sustainable local economic development.
