Enhancing SME financing key to boost economic growth

Experts tell IFC, BB confce on SME Financing

Published : 28 Nov 2023 08:59 PM

The micro, small, and medium enterprises (MSME) sector In Bangladesh faces a financing gap of $2.8billion. With nearly 10 million SMEs contributing to about 25 percent of GDP, enhancing SME financing is key to boosting economic growth, said experts at an event.  

To explore the various aspects of financing for small and medium enterprises (SMEs) in Bangladesh, IFC, in association with Bangladesh Bank and the government of Norway, organizeda conference in Dhaka. 

Experts, policymakers, and stakeholders from across the world shared their insights to help foster a resilient and inclusive environment for SME financing in the country. 

The event touched upon the partnership between IFC and Bangladesh Bank, results of an impact assessment study carried out on women owned SMEs, next generation SME financing trends, and global best practices in SME financing. It also addressed the challenges and opportunities in SME financing, identifying solutions and innovations in light of global SME finance developments.Highlighting the joint efforts of IFC and Bangladesh Bank in SME financing, the conference showcased initiatives, including developing the country’s first Credit Guarantee Scheme (CGS), reforming an SME finance policy, and strengthening the sector’s capacity.

Speaking at the conference as Chief Guest, Governor of Bangladesh Bank, Abdur Rouf Talukder, said, “Recognizing that cottage, micro, small and medium enterprises (CMSMEs) are the backbone of society, Bangladesh Bank is spearheading several initiatives to mainstream medium and small businesses into the financial landscape."

Martin Holtmann, IFC Country Manager for Bangladesh, Bhutan, and Nepal, said, “ IFC’s collaboration with Bangladesh Bank to develop SME solutions highlights a milestone in achieving financial inclusion and economic advancement and underscores the transformative power of partnerships, innovation, and our collective commitment to progress.”

Espen Rikter-Svendsen, Ambassador of the Royal Norwegian Embassy in Bangladesh, said, “Lack of access to finance is the biggest impediment to the growth of SMEs in Bangladesh, particularly for the women-headed SMEs. Recognizing and addressing the challenges faced by SMEs and women entrepreneurs is not just a matter of economic significance but also a step towards fostering gender equality.”