►► We have directly and indirectly trained around 20 lakh entrepreneurs

Professor Md Masudur Rahman
Chairperson, SME Foundation

SME Foundation started its operations in 2008 and has been working for nearly 16 years, primarily providing policy support and capacity development for SMEs. We have directly and indirectly trained around 20 lakh entrepreneurs through various types of training programmes. Capacity development is crucial for entrepreneurs, and we divide it into several parts: understanding their businesses well, formalising their businesses, updating technology in their production processes, improving product design, managing workers, and enhancing productivity.

Apart from training, our major success is initiating the concept of cluster-based industrial development in Bangladesh through the SME Foundation. We are currently working on development in 70 clusters identified from about 200 clusters, employing nearly 6,00,000 people. As a result, the quality and productivity of their products have increased. We have improved the physical infrastructure in these clusters and created market connections to promote their products. Although we are not 100% successful, we have paved the way for market orientation.

SMEs still face many obstacles in obtaining loans. We started offering single-digit loans in 2012, which later became a national initiative. Currently, both government and private banks have simplified the SME loan process, and many banks are eager to provide loans. SME Foundation plays a significant role here. We also work on determining government policies. We have submitted numerous proposals to the NBR to protect local industries, and so far, 70 proposals have been accepted. SME Foundation has established itself as a trusted entity for these entrepreneurs.

Small business owners, especially women entrepreneurs, face significant challenges. Since the early 1980s, women in our country have started contributing to the economy, particularly in the garment industry, which has brought about a radical change in Bangladesh’s economy and social landscape. Middle and upper-class women have also engaged in economic activities, and currently, 43% of capable women are involved in economic activities. While there are still social barriers to women’s involvement in business, people’s attitudes have changed significantly due to the government’s women-friendly policies and priority in lending. However, progress is slow, and we are working to resolve financial problems, create market access, and increase productivity for women entrepreneurs.

SME Foundation has created websites for various clusters. As a non-profit organisation, we work as partners with entrepreneurs. Many self-starting female entrepreneurs in Bangladesh use digital platforms, but creating a Facebook page is not feasible for everyone. Therefore, we have an agreement with Facebook to provide training on technical knowledge and legal aspects for entrepreneurs using the platform.
At our SME fair, 60% of the entr
preneurs are women, and we provide 26% of our total credit to women. We have established women’s chambers across the country.

As much as 90% of GDP comes from private entrepreneurs, who must play a primary role in digitising their businesses. We connect entrepreneurs with platforms like Daraz and Swapno, helping them expand their businesses. If the SME Foundation, the ICT Ministry, and private entrepreneurs work together, an ecosystem will be created, leading to the digitalisation of businesses. Once, after completing education, everyone’s main goal was to secure a job. However, this notion has significantly changed over the past 10-12 years due to ample entrepreneurship opportunities provided by the prime minister. This has encouraged the youth generation, resulting in many new private sector initiatives in manufacturing, services, and trading across the country in the last 15 years. This growth is driven by various government policies.

To sustain this growth in the long term, policy support, financial assistance, and training facilities are crucial. Both government and private sectors need to collaborate to support these entrepreneurs. This initiative has already begun and is expected to accelerate further in the future.

Since its establishment, the SME Foundation has been equipped with 11 strategies. Our main objective is to create and sustain micro, small, and medium-sized entrepreneurs. Our tasks include creating new markets, transferring technology, and connecting entrepreneurs to markets. We have developed AI capabilities suitable for SMEs and work on creating connections with large industries. I believe the foundation’s main role will be to support SME entrepreneurs in meeting the challenges of LDC graduation in 2026.

The foundation faces several obstacles, with financial support dependency being the main problem. Initially, a fund of Tk200 crore was allocated, but no financial aid has been received from the revenue budget. Currently, the scope of our SME activities has expanded significantly, but we lack the necessary financial resources. We need financial support from the government. Although we work with SME entrepreneurs across the country, the foundation has no office outside Dhaka. As a result, entrepreneurs have to travel to Dhaka for services. We need offices at least in divisional cities. With the necessary support, we can overcome these obstacles and increase our activities.

►► We achieved 100% loan disbursement target two years in a row

M Nazeem A Choudhury
Deputy Managing Director of Prime Bank PLC

Prime Bank has distinguished itself in the CMSME sector through a dedicated commitment to growth and innovation. By focusing on market-driven products, transformative initiatives, and digital advancements, we aim to foster the prosperity of CMSME.

Notably, we achieved a 100% loan disbursement target for the government’s CMSME stimulus package two years in a row, supporting over 4,600 CMSMEs. Our portfolio predominantly serves small and micro enterprises, comprising 81% of our CMSME portfolio.

We are honoured to have been recognised as “SME Financier of the Year-ASIA” at the Global SME Finance Awards for three consecutive years, underscoring our impactful contributions to the sector.
Looking forward, we are humbly introspective. Initiatives like our Financial Literacy Programme and technology-based lending solutions for CMSMEs represent ongoing efforts to enhance accessibility and support for CMSMEs at scale. These endeavours reflect our commitment to continually improve and empower CMSMEs on their growth journey.

In the next five years, Prime Bank envisions significant growth in its SME business through digitalisation and innovation. We plan to implement a “Digital Account Opening Procedure” and Digital Lending Facilities for CMSMEs, eliminating manual intervention. Additionally, we will launch digital supply chain finance solutions to support SMEs working with MNCs and LLCs. We bnare confident these initiatives will help us triple our current portfolio size, empowering SMEs nationwide.

We recognise the need to advance SME digitisation and offer various digital solutions. Our MyPrime internet banking app allows CMSME customers to access and manage their accounts, transfer funds, pay bills, and more. PrimePlus enables real-time account opening without visiting a branch. PrimePay provides a digital cash management solution. Additionally, we are introducing digital nano lending based on credit scores and launching digital Supply Chain finance solutions to support SMEs as distributors and suppliers.

►► We disbursed Tk154,694 crore to 16 lakh CMSME customers

Syed Abdul Momen
DMD, BRAC Bank

Our visionary founder Sir Fazle Hasan Abed established BRAC Bank in 2001 to extend banking services to the unbanked “missing middle”. Since its inception, BRAC Bank has played a leading role in ensuring easy access to credit for smallholder businesses, especially in semi-urban and rural Bangladesh.

Today, BRAC Bank is Bangladesh’s largest collateral-free financier for CMSME, with over 85% of its loans provided without any mortgage. We have disbursed Tk154,694 crore to around 16 lakh CMSME customers, positively impacting the lives of crores of people, including their families and staff. Our ultimate goal extends beyond being a mere lender; we aspire to be a comprehensive banking and financial partner for grassroots entrepreneurs.

Our commitment to clients goes beyond traditional banking. We offer comprehensive support, including capacity building, networking, and market access facilities. Our skill development programmes, such as “Uddokta 101” and “Amrai TARA,” equip business owners with the knowledge and skills needed for entrepreneurial success. Additionally, we are expanding into unbanked segments through innovative digital financial solutions like “Shafollo,” “Jibika,” and “Shabolombi.”

There is still a long way to go to bring all CMSME entrepreneurs under the formal financial system. With digital infrastructure like Astha, eLAP, Shafollo, Jibika, and others, we could have reached more entrepreneurs in remote parts of the country. Digital solutions make banking services faster, cheaper, and more accessible for CMSMEs.

Since 2022, BRAC Bank has adopted a growth strategy to double its business by 2025. SME business is central to this strategy, constituting more than 50% of the asset book. SMEs have been achieving nearly 30% growth over the last few years. Leveraging two decades of experience, expert personnel, and advanced technology, BRAC Bank aspires to become the largest SME Bank in the country. BRAC Bank is deeply committed to providing easy access to finance for grassroots-level CMSMEs. As of December 2023, our SME loan portfolio stood at Tk26,250 crore, and our SME deposit portfolio at Tk9,324 crore, achieving remarkable growth rates of 27% and 39%, respectively.

This growth is a testament to our ambitious strategy, which we are determined to continue in the coming years. Currently, we hold a 15.6% share of the country’s total SME financing by private commercial banks, a figure that is set to rise significantly in the next five years.

Transitioning SMEs from traditional to digital methods is the greatest challenge. In Bangladesh, major digital transformation projects in the banking industry are concentrated on retail and corporate businesses. The SME sector has a long way to go to catch up with the overall digital transformation journey.
A technological overhaul is the cornerstone of SME banking’s growth. Our data shows that it has significantly improved the customer journey, accelerated processes, and enhanced convenience. Consequently, our division has been diligently prioritizing the digitisation of SMEs.

The bank rolled out digital SME loan processing nationwide through the SME Loan Origination System eLAP simplifying the loan application process, increasing productivity, and reducing processing time. The bank launched the country’s first document-less real-time digital SME Loan, “Shafollo,” and the digital loan for individuals, “Jibika,” to provide greater access to finance in marginal areas. This has enabled the bank to penetrate previously untouched areas.

The bank will undertake a holistic tech-led transformation of existing processes and products, allowing faster processing and significantly reducing service costs. It aims to transform the SME business by leveraging digital solutions to provide comprehensive banking services to diversified segments within the CMSME sector across Bangladesh. Transformation through digitisation, customer-centric and innovative products, and exploring opportunities beyond traditional boundaries will be key to growing business at scale in SME frontiers.