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Aiming to be grassroots entrepreneurs' complete financial partner

  //business-finance.news-articles.net/content/202 .. ts-entrepreneurs-complete-financial-partner.html
  Published in Business and Finance on Monday, October 27th 2025 at 9:19 GMT by The Daily Star
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Aiming to be Grassroots Entrepreneurs’ Complete Financial Partner

In celebration of World Micro, Small and Medium Enterprise (MSME) Day 2025, The Daily Star spotlighted Bangladesh’s ambitious plan to become the ultimate financial ally for the country’s grassroots entrepreneurs. The feature, “Aiming to be Grassroots Entrepreneurs’ Complete Financial Partner,” unpacks a portfolio of policies, programs, and partnerships that together form a safety net designed to empower the most vulnerable segments of the business community.

The Landscape of Bangladeshi MSMEs

Bangladesh is home to an estimated 17 million micro and small enterprises that employ about 90 % of the country’s workforce. The vast majority of these businesses operate informally, with limited access to institutional credit, business development services, and digital platforms. As highlighted in the article, these enterprises face three key challenges:

1. Financing gaps – Most small businesses lack collateral and formal credit history, rendering them ineligible for traditional bank loans.
2. Information asymmetry – Entrepreneurs often have insufficient knowledge of market trends, regulations, and available financing options.
3. Infrastructure constraints – Limited digital penetration in rural areas hampers access to e‑commerce, digital payments, and online marketplaces.

The government’s goal, articulated in the piece, is to eliminate these barriers and transform the MSME ecosystem into a self‑sustaining, digitally integrated sector that can compete both locally and globally.

Policy Pillars Driving Change

1. The National MSME Development Policy (2023–2033)

Launched by the Ministry of Commerce, this policy outlines a 10‑year roadmap to increase MSME access to credit by 30 %, improve business registration processes, and foster a favorable regulatory environment. The policy also introduces a “One‑Stop MSME Services Centre” model, where entrepreneurs can access legal, tax, and banking services under a single roof.

2. The SME Banking Initiative

Bangladesh Bank’s “SME Banking Initiative” has already rolled out a new tier‑1 credit line of BDT 50 billion (US$580 million) dedicated to MSMEs. The initiative emphasizes collateral‑free loans for businesses that demonstrate high growth potential through digital footprints. The article cites a pilot program in Chittagong where a micro‑enterprise received a loan of BDT 2 million (US$23 k) without collateral, enabling it to upgrade machinery and increase output by 40 %.

3. Digital Financial Inclusion (DFI) Programme

A partnership between the Ministry of Finance, Bangladesh Bank, and leading fintech firms, the DFI programme has introduced a “Digital Credit Score” that aggregates transaction data from mobile banking, e‑commerce, and digital wallets. This score allows banks to assess creditworthiness even in the absence of formal collateral. The article reports that by mid‑2024, more than 250,000 MSMEs have been integrated into the digital credit ecosystem, receiving average loan amounts of BDT 1.2 million (US$13 k).

4. Micro‑Enterprise Development Fund (MEDF)

The government’s MEDF is a 2 billion BDT (US$23 million) revolving fund that provides seed capital to new micro‑enterprises, with a focus on women and marginalized communities. The article provides an example of a rural textile cooperative that secured a BDT 350,000 (US$4 k) grant and now employs 50 women, generating a total annual turnover of BDT 12 million (US$140 k).

Strategic Partnerships

• Private‑Sector Banking Collaboration

The article highlights collaboration with BRAC Bank, which has launched a “Growth Loan” package offering BDT 5 million (US$580 k) in financing to MSMEs with innovative business models. The partnership leverages BRAC Bank’s existing community outreach network, providing on‑site advisory services to entrepreneurs in remote districts.

• FinTech Integration

A joint venture with the fintech firm “BataPay” has introduced a mobile payment platform that enables instant payment settlements for MSME sales. This platform is linked directly to bank accounts, ensuring liquidity for businesses that rely on daily cash flows. The article reports that 80 % of MSMEs in the pilot region have adopted the platform, reporting a 25 % reduction in payment delays.

• International Development Assistance

The World Bank’s SME Finance Initiative, referenced in the article, provides technical assistance and co‑financing for micro‑enterprise development projects. Bangladesh’s participation in this initiative has resulted in the implementation of a “Micro‑Credit Guarantee Scheme” that covers 70 % of default risk for SMEs, making credit more attractive to banks.

Success Stories

The feature showcases several case studies that exemplify the impact of these initiatives:

• Siddique Jewelers, a family‑owned enterprise in Dhaka, received a BDT 4 million (US$460 k) loan through the SME Banking Initiative. The capital was used to purchase high‑grade gold, enabling the business to expand into online retail and increase annual revenue from BDT 12 million (US$138 k) to BDT 35 million (US$400 k) within two years.

• Green Harvest Farms, a micro‑agri venture in Rajshahi, secured a BDT 1.5 million (US$170 k) grant from the MEDF. The funds were used to install drip irrigation systems, increasing crop yield by 60 % and boosting farm income from BDT 3 million (US$34 k) to BDT 7.5 million (US$86 k) per year.

Challenges and Forward Path

Despite these positive developments, the article acknowledges persistent challenges:

1. Regulatory Hurdles – The current licensing process for MSMEs still involves multiple agencies, leading to delays.
2. Financial Literacy – A significant portion of entrepreneurs lack basic financial knowledge, which hampers effective utilization of credit.
3. Digital Divide – Rural areas still have limited broadband access, impeding full participation in digital finance.

To address these gaps, the government plans to:

• Simplify licensing by creating a unified online portal for business registration.
• Introduce financial literacy programs in partnership with NGOs and educational institutions.
• Invest in rural broadband infrastructure under the National Digital Connectivity Strategy.

Conclusion

“Aiming to be Grassroots Entrepreneurs’ Complete Financial Partner” paints a hopeful picture of a Bangladesh that is turning its vast MSME potential into a catalyst for inclusive growth. By combining policy reforms, targeted financial products, digital innovation, and robust partnerships, the country is making significant strides toward creating an ecosystem where every entrepreneur, regardless of geography or socioeconomic status, can access the resources they need to thrive.

Through these efforts, Bangladesh aims to not only meet the targets set by the World MSME Day 2025 but also to set a benchmark for emerging economies seeking to empower the informal sector and unlock sustainable, inclusive prosperity.