Together with the United Nations Development Programme (UNDP), the government-owned SME Foundation has launched creative initiatives to assist Bangladesh’s cottage, micro, small, and medium-sized businesses (CMSMEs). One of these programs is a blended finance facility that aims to provide access to capital for business owners nationwide by utilising extra resources.
To improve financial inclusion for CMSMEs, blended finance—a strategy that mixes investments from the public or private sectors with development assistance—will be employed. Only 9 per cent of CMSME owners in the nation now have access to bank loans. The new strategy seeks to broaden this scope, particularly supporting business owners who are at risk from the effects of climate change.
The SME Foundation and UNDP jointly hosted a session in a city hotel where the news was made. The chief guest was Md. Mushfiqur Rahman, the chairperson of the SME Foundation.
In their remarks, the organisers referenced data from the 2013 Economic Survey, which showed that more than 70 per cent of Bangladesh’s more than 78 lakh CMSME businesses are situated outside of the country’s capital, Dhaka. According to figures from the Bangladesh Bank, only roughly 6.79 lakh of these businesses have obtained loans amounting Taka 1.7 lakh crore. This shows that despite several efforts by financial institutions, almost 91 per cent of CMSMEs are still not part of the official credit system.
Field trips to climate-sensitive regions and stakeholder meetings, particularly with businesses, have been carried out to evaluate the requirements and realities on the ground prior to the programs’ launch.
Entrepreneurs will also receive training as part of the new programs to strengthen their ability to repay loans. Additionally, individuals affected by climate change will get support measures like grants, insurance, and guarantee schemes.
The SME sector plays a vital role in Bangladesh’s economy, contributing around 32 per cent to the national GDP. As per the 2013 Economic Survey, CMSMEs comprise over 99 per cent of the country’s industrial enterprises and account for approximately 85 per cent of total industrial employment, providing livelihoods for more than 2.5 crore people.
These initiatives aim to foster a more inclusive and resilient MSME sector, driving economic growth and ensuring broader access to financial resources for entrepreneurs across Bangladesh.
