Loan barrier still a challenge for SMEs: experts
Micro, small, and medium enterprises (MSMEs) continue to face significant hurdles in obtaining loans despite the Bangladesh Bank's supportive policies to ease access to finance, stakeholders said at a roundtable in Dhaka today.
Organised by the SME Foundation, with support from the Local Government Division, Swisscontact, and Innovision Consulting, the event titled "Access to Finance: From Policy to Practice" brought together entrepreneurs, bankers, policymakers, and development partners to identify practical barriers to financing the MSME sector.
For all latest news, follow The Daily Star's Google News channel. At the event, Md Musfiqur Rahman, chairperson of the SME Foundation, said nearly 1.18 crore MSME entrepreneurs across the country are still failing to realise their full potential due to limited access to finance.
"Despite the sector's immense contribution to the national economy, various obstacles still restrict their growth," he said.
"We must collectively support these entrepreneurs and remove the barriers to unlock real economic progress."
According to the 2024 Economic Census by the Bangladesh Bureau of Statistics, over 99 percent of the country's MSMEs fall under the cottage, micro, small, and medium (CMSME) category.
These enterprises contribute nearly 32 percent to the gross domestic product and account for 85 percent of employment in the industrial sector.
Anwar Hossain Chowdhury, managing director of the SME Foundation, described MSMEs as the "backbone of the economy" and emphasised the need for coordinated efforts to address the structural challenges they face.
Farzana Khan, deputy managing director of the foundation, noted that although financing for MSMEs has been widely discussed, few tangible solutions have been implemented.
"Many of the challenges have been talked about for years, yet very few have seen real progress," she said.
Rukhen Uddin Ahmed, senior adviser at Swisscontact, underscored the need to explore alternative sources of financing outside traditional banking channels, including fintech platforms and private investment vehicles.
The roundtable also highlighted the disconnect between the central bank's policy initiatives and their implementation at the grassroots level, where many MSME entrepreneurs continue to face issues such as bureaucratic delays, excessive collateral requirements, and a lack of customised loan products, according to a press release.
Since its inception in 2006, the SME Foundation—a government-affiliated agency under the Ministry of Industries—has supported nearly 20 lakh entrepreneurs, 60 percent of whom are women.
The organisation operates in line with the National Industrial Policy 2022, SME Policy 2019, and the Sustainable Development Goals (SDG) 2030.
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