[🇧🇩] Cottage Industry in Bangladesh

[Saif]

Strategic growth for thriving cottage industry

The country's cottage industry, recognised as the backbone of small entrepreneurs and rural employment, has long suffered due to various challenges, primarily stemming from a lack of structured data. Until recently, there was no comprehensive database detailing the sector, which hindered effective

thefinancialexpress.com.bd

Strategic growth for thriving cottage industry
Wasi Ahmed
Published :
Mar 26, 2025 00:16
Updated :
Mar 26, 2025 00:16

The country's cottage industry, recognised as the backbone of small entrepreneurs and rural employment, has long suffered due to various challenges, primarily stemming from a lack of structured data. Until recently, there was no comprehensive database detailing the sector, which hindered effective planning at both the macro and micro levels. The absence of a structured database has long impeded the planned growth of this sector.

Recognising this gap, the Bangladesh Bureau of Statistics (BBS) conducted an extensive field survey some time ago to compile a detailed database on the cottage industry. The survey captures crucial aspects such as the overall characteristics of different sub-sectors, regional variations, and specific challenges facing cottage industries across the country.

According to the survey, Bangladesh has a total of 830,000 cottage industry units, employing over 29 million workers. An encouraging aspect is that nearly 97 per cent of these units operate throughout the year, indicating the resilience and sustainability of the industry. The survey also highlights that the sector contributes significantly to the economy, producing goods worth approximately Tk 395.38 billion annually, with a value addition of about Tk 314.86 billion.

A striking feature of the survey findings is the geographical distribution of cottage industry units. Around 56.3 per cent of these units are located in rural areas, with 20 per cent situated at the homesteads of their owners. This underscores the sector's role in supporting rural livelihoods and sustaining employment opportunities outside urban centres.

However, there are also some concerning findings. The survey reveals that approximately 16 per cent of the workforce employed in the cottage industry does not receive any wages, as they consist of family members engaged in the production process. The lack of wage recognition renders their labour unproductive in terms of economic measurement since it is not accounted for in the manufacturing cost structure. This issue needs to be addressed to ensure that family labour is appropriately valued and contributes to the financial stability of cottage industry workers.

The highest concentration of cottage industry units-around 30 per cent-is found in the Dhaka division, while the lowest is in the Sylhet division. Despite their diverse manufacturing processes, these industries commonly face fundamental challenges that limit their growth potential. One of the key issues is the definition of cottage industries in the government's industrial policy, which many believe is outdated and restrictive.

Under the current definition, a cottage industry is characterised as a unit employing no more than ten workers and operating with a capital of less than Tk 500,000. This definition fails to capture the evolving nature of cottage industries, particularly in the age of technological advancements. By setting strict limitations on workforce size and capital investment, the definition inadvertently discourages growth and scalability. As a result, a large proportion of cottage industry units remain unregistered with relevant government agencies such as the Bangladesh Small and Cottage Industries Corporation (BSCIC) or local government bodies, reflecting the industry's lack of reliance on state support mechanisms. This lack of registration limits their access to financial assistance, technology transfer, training programmes, and other essential resources that could enhance productivity and competitiveness.

The overall scenario of the cottage industry remains chaotic due to these structural and operational challenges. However, there are opportunities to organise and strengthen the sector through systematic interventions. A key strategy could be the establishment of support programmes focused on product development, diversification, and adaptation for both domestic and export markets.

Technology transfer is another crucial area for improvement. Many cottage industry units still rely on outdated tools and traditional production methods, limiting their efficiency and quality standards. Introducing modern equipment and innovative techniques can significantly boost productivity and enhance the market appeal of cottage industry products. Additionally, the use of improved raw materials and production inputs can lead to better product quality and higher profit margins.

Access to credit remains a major constraint for cottage industry entrepreneurs. Government policies should facilitate credit access tailored to the specific needs of small-scale producers. If the authorities, particularly the BSCIC, actively monitor and support the activities of this vast yet disorganized sector, credit facilities can be structured to provide meaningful assistance. Many cottage industry entrepreneurs struggle with securing loans due to the lack of collateral or formal business registration. Addressing these issues through financial inclusion initiatives can empower small entrepreneurs to expand their businesses and improve their livelihoods.

A holistic approach is necessary to transform the cottage industry into a well-organised and thriving sector. Policymakers should revise the existing definition of cottage industries to reflect the changing dynamics of small-scale production and entrepreneurship. Encouraging formal registration through incentives, rather than mandates, can help integrate cottage industry units into mainstream economic activities while allowing them to retain their operational flexibility.

Marketing support is another critical area that requires attention. Many cottage industry products have strong potential in both domestic and international markets, but limited market exposure prevents them from achieving higher profitability. Establishing dedicated platforms for cottage industry products, such as trade fairs, online marketplaces, and branding initiatives, can help entrepreneurs reach a broader customer base.

Furthermore, skill development and training programmes tailored to the needs of cottage industry workers can enhance productivity and innovation. Training in areas such as business management, financial literacy, and modern production techniques can equip entrepreneurs with the knowledge and skills needed to scale their businesses sustainably.​

 

[Saif]

Developing roadmap for MSMEs' digital transformation

Digital transformation is the transition of process-flow from manual to digital intervention in enterprise management. The world economy is moving towards embracing the digital transformation in every sphere of business practices. The majority of business entities in the global market are Cottage,

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Developing roadmap for MSMEs' digital transformation
Sanjoy Pal
Published :
Apr 27, 2025 22:43
Updated :
Apr 27, 2025 22:43

Digital transformation is the transition of process-flow from manual to digital intervention in enterprise management. The world economy is moving towards embracing the digital transformation in every sphere of business practices. The majority of business entities in the global market are Cottage, Micro, Small and Medium Enterprises (CMSMEs) and the ASEAN region accounts for most of them. ASEAN Investment Report in 2022 revealed that, more than 97 per cent of enterprises in the region are MSMEs. They account for 67 per cent of employment in the region, an average of about 28 per cent of gross value added, about 20 per cent of export revenues and about 45 per cent of GDP. It has also been exposed that, three member states (Singapore, Indonesia and Malaysia, in that order) account for 83 per cent of start-ups that have raised more than $1 million in funding in the region.

The pursuit of process reengineering from product innovation to procurement and sales is increasing their arena through utilisation of digital means day by day. As part of process automation for accounting, inventory management, invoicing etc. different technologies such as digital devices, business management software are also being integrated. But, there are some barriers noticed to accept the process automation by MSMEs, where the limited skills and knowledge to use the software, human resource constraints, the cost of procurement of digital tools, cost of software set up, cost of operations of the automation are common. Sometimes, the income they earn from their business does not commensurate the transformation cost incurred. As a result they are getting rid of embracing the digital transformation in easiest way.

Bangladesh Bank, the central bank of Bangladesh, has taken a timely initiative by reviewing the Master Policy on CMSME financing, which includes the trading sector under the medium enterprises category and recognizes marginal enterprises possessing UBID (Unique Business Identification) or DBID (Digital Business Identification) as per the Digital Commerce Operation Guidelines 2021. They have also encouraged the use of Digital Financial Services (DFS) and Mobile Financial Services (MFS) in CMSME financing, along with the development of QR code and chatbot services for CMSMEs. These initiatives help to establish a digital footprint for CMSMEs in Bangladesh. However, they are not yet sufficient for the full development of MSME sector participants.

The integration of digital technology and engagement of MSMEs will get pace if a specific roadmap for the digital transformation can be developed. Some prolific recommendations to sketch the roadmap for digital transformation of MSMEs are pointed out below.

Comprehensive policy on Digital Transformation for MSME. A comprehensive policy on Digital Transformation for MSME must be adopted, where the process, technological investment, employment of skilled manpower, service propositions etc. are to be mentioned. Additionally, the government must develop a Digital Trade Policy and embrace digital trade in international trade services to streamline the trade process in a shorter frame.

Development of Digital Infrastructure. Optimal level infrastructure development such as reliable internet connectivity, easily accessible software management tools for MSMEs must be ensured. Market competitors for software development and management (Automation Company) will be increased to minimise the automated software and tolls installation and management. Notable presence of consultancy firms for MSMEs in the marketplace should be confirmed. Nano loan for procuring digital devices for marginal MSMEs should be launched by the banks that may be repaid by monthly instalments.

Digital Education. An awareness building programme on digital financial literacy for MSMEs should be undertaken. The Technical Training Institute must provide training on Digital Transformation for MSMEs to youths either free of charge or at an affordable cost.

Digital Marketing Techniques for MSMEs. MSMEs solidifying their business footprint through digital platforms like Facebook, Instagram, Tiktok and different sites for e-commerce should be encouraged with tax benefits. Organisations supporting MSMEs should develop training programmes for them in line with international standards.

Incentive for MSMEs and Fintech Developers. The central bank should launch an incentive package to support the financing of MSME transformation. Additionally, an incentive package for financing fintech developers who innovate MSME processes should be implemented. Digitally transformative MSMEs that export their products abroad should be encouraged through concessional duty benefits provided by the government. These measures will motivate MSMEs to contribute more significantly to increasing the country’s foreign reserves.

Investments and Rewards. The Chamber of Commerce and Industries, along with other member organisations, must embrace digital transformation and invest in it to develop marginal MSMEs. They should annually highlight and award the top 10 transforming MSMEs in the category of successful digitally transformative enterprises to encourage visible impacts of digital transformation.

Bangladesh is a country where eagerness to harness technology, openness to innovation, strong growth prospects, and expanding employment opportunities create a favourable environment for economic success. To ensure inclusive benefits, the Fourth Industrial Revolution (4IR or Industry 4.0) also presents numerous prospects for MSMEs, such as boosting efficiency in business processes, accessing global markets, and diversifying customer engagement — all of which can be a strong fit for Bangladesh. By adopting emerging technologies like AI, data analytics, and others, MSMEs can drive innovation and make data-driven strategic decisions more rapidly. Therefore, digital transformation for MSMEs is a blessing for the digital future, not a hazard.

The writer is a banker and certified Financial Modelling & Valuation Analyst (FMVA).​

 

[Saif]

Painful development of CMSME startups

The rise of startups within the cottage, micro, small, and medium enterprise (CMSME) sector has been a bright spot for the economy in recent years. This CMSME sector remains the backbone of economic growth and job creation as it accounts for roughly 30 per cent of the country's GDP and employs near

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Painful development of CMSME startups

FE
Published :
Jun 01, 2025 00:05
Updated :
Jun 01, 2025 00:05

The rise of startups within the cottage, micro, small, and medium enterprise (CMSME) sector has been a bright spot for the economy in recent years. This CMSME sector remains the backbone of economic growth and job creation as it accounts for roughly 30 per cent of the country's GDP and employs nearly 85 per cent of its industrial workforce. What's worrying, however, is that a concerning number of new businesses in this industry don't make it past their first year or two in operation. There is a clear gap between the sector's promise and performance as a result of this high rate of attrition, which prevents the sector from reaching its full potential. This fragility lays bare the unique challenges that startups in the country must grapple with.

One major obstacle that causes many CMSMEs to fail early is their inability to identify and reach target markets. Far too often, entrepreneurs rely on outdated, word-of-mouth promotion while neglecting the potential of digital tools. Many also lack a firm grasp of key business fundamentals such as branding, pricing strategies, consumer behaviour and effective packaging design. In an increasingly competitive market, this limits their reach and customer engagement. Moreover, insufficient budgets for advertising and promotion further marginalise their products in both domestic and international markets. While the SME Foundation has made commendable efforts by organising fairs and facilitating participation in international trade exhibitions, these initiatives simply aren't enough to address the deeper structural gaps in entrepreneurial capacity and market knowledge. Even the most innovative ventures will struggle to evolve into sustainable enterprises when they lack strong connections to the market.

Another significant challenge is the absence of tailored institutional support and policy frameworks. In a labour-intensive economy like Bangladesh's where formal employment opportunities are scarce, strengthening CMSMEs can drive inclusive growth, reduce poverty and enhance women's economic participation, especially as women represent 6.47 per cent of SME entrepreneurs. However, these businesses are often left to weather the storms of market competition without adequate support. Institutional training in business skills, marketing and customer engagement is notably absent. Moreover, the existing Competition Commission has done little to curb the dominance of large enterprises, further weakening CMSME competitiveness. Some government initiatives such as refinancing schemes and credit guarantees show promise but their full impact is yet to be realised. For example, the disbursement of stimulus packages has fallen short of targets in later phases and the sector's overall contribution to GDP remains stagnant compared to some neighbouring countries. This suggests a notable disparity between policy objectives and their execution on the ground.

To reverse the tide of early business failures and boost growth, the government must attend to the issues that held back CMSME sector from thriving. Entrepreneurs need continuous, practical training in core business skills, tailored to industry needs and delivered through accessible platforms like online courses and community workshops. Policy support must also be streamlined to ease access to raw materials and strengthen market linkages at the grassroots level. As proposed by industry leaders, establishing dedicated SME product exhibition centres would create vital spaces for showcasing products and direct interaction with buyers. Furthermore, effective enforcement of the Competition Law 2012 and strengthening the Competition Commission are crucial to ensure a level playing field and prevent large industrial groups from crowding out smaller enterprises. With the right support in market research, branding and digital integration, it is possible for the country to create an enabling ecosystem that will transform its CMSME industry into a lasting driver of employment and growth.​

 

[Saif]

Multiple factors impede MSMEs’ growth

Bangladesh's highest job creating small and medium enterprises has been showing a grim picture over the last few years as their production shortfall is casting a long shadow over the nation's employment landscape, analysts said on Saturday. The decline, exacerbated by a confluence of economic pres

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Multiple factors impede MSMEs’ growth

FHM Humayan Kabir
Published :
Jun 01, 2025 00:33
Updated :
Jun 01, 2025 00:33

Bangladesh's highest job creating small and medium enterprises has been showing a grim picture over the last few years as their production shortfall is casting a long shadow over the nation's employment landscape, analysts said on Saturday.

The decline, exacerbated by a confluence of economic pressures and systemic challenges, is hindering job creation and, in some cases, leading to job losses across a sector that is a vital engine of employment in the country, they said.

The Micro, Small and Medium Enterprises (MSMEs) are a cornerstone of Bangladesh's economy, accounting for an estimated 90 per cent of industrial units and 80 per cent of industrial employment.

The MSMEs, contribute 7.17 per cent to the Gross Domestic Product (GDP), and play a crucial role in job creation, poverty reduction, and inclusive growth, especially for women and youth.

However, recent data from the Bangladesh Bureau of Statistics (BBS) indicates a slowdown in factory output growth, with estimates showing a drop to a mere 5.07 per cent for the fiscal year (FY) 2023-24, significantly lower than previous years.

High production costs, erratic energy supply, a surging dollar, and escalating interest rates have forced many MSMEs to operate below capacity or even shut down, threatening to reverse hard-won gains in job creation, insiders said.

An estimated 85-per cent employment of the country is created in the informal sector, which mostly deals with MSMEs.

Economists say lower growth in SMMEs means slim employment generation as these industries are the country's top generator of jobs.

Since MSMEs are the backup industry for larger ones, their production fall will ultimately affect manufacturing at bigger industries too, they add.

The Bangladesh Labour Force Survey-2022 shows an estimated 60-million people, who constitute 84.9 per cent of the total working population here, are engaged with the informal employment.

According to a recent data by the BBS, the year-on-year industrial production growth rate in MSMEs lowered to only 5.07 per cent in FY2024.

The rate was lower than that in the previous two consecutive fiscals of FY2022 and FY2023.

According to the MSMEs industrial production index, the FY2022 growth was 15.39 per cent and that in FY2023 was 9.03 per cent, according to the BBS.

According to the BBS, the country's unemployment rate rose to 4.49 per cent during July-September quarter of the year 2024 from that of 4.07 per cent in the same period a year earlier.

The political turmoil and security concerns took a toll on the production at the SMMEs resulting in an impact on the labour market.

The Bangladesh's unemployed people has been reached to 2.66 million in the third quarter of last year, an increase of 0.17 million from a year earlier.

Of the total unemployed population, jobless men accounted for 1.79 million, up from 1.64 million in the same period the previous year, while the number of unemployed women reached 0.87 million, compared with 0.85 million a year earlier, the BBS statistics showed.

Anam Ahmed, a furniture enterprise owner at capital's Shewrapara area, told the FE that their production has been dropped over the last few years as the demand for home-decors has fallen.

"We could sale nearly 250-300 units of furniture per months even before two years ago. Now it has fallen below 200 units. So, I have cut the productions at my factory," he added.

Two years back, some 30 people were working at my factory which now dropped to only 16, Mr Anam said.

Under MSMEs, the production of machinery and equipment has dropped drastically as it marked 45.55-per cent negative growth in FY2024, BBS data showed.

Machinery and equipment output maintained positive growth in FY2022 and FY2023.

The production of wood-made goods and corks, printing and reproduction of recorded media, chemicals and chemical products; pharmaceutical products and preparations, computer, electronic and optical products, and transport equipment posted negative growth in FY2024.

Dr Zahid Hussain, a former World Bank economist, said that a gradual fall in demands has affected the production of MSMEs domestically.

The several factors including the political uncertainty, security challenges and economic and financial sector vulnerabilities are the key reasons on the way to the growth at the MSMEs, he added.

"The month-on-month real wage has been declining in the last couple of years. Thus, the purchasing power of people has fallen. So, the demand for MSME products has dropped," the economist added.

Since the demand has dropped over the years, production at smaller and medium industries has ultimately declined, said Dr Hossain.

He urged the government to supply seamless power and gas, formalise smaller manufacturing sectors and subsectors, ensure internal and external markets, and cut the inflationary pressure with intent to boost production at CMSMEs.

Policy Exchange Bangladesh Chairman Dr Masrur Reaz said as the highest number of jobs is created by MSMEs in Bangladesh, their lower growth might affect the employment.

If the trend continues, Bangladesh's employment will shrink further and people will fall behind the poverty line, he said. As these sectors are the backup industry for large manufacturers, their recovery is needed, the economist added.

"Most of the cottage, micro and small industries in Bangladesh are set up on an informal basis. They should be brought under the formal system in a bid to upgrade their capacity to create decent employment," Mr Reaz said.

Anwar Hossain Chowdhury, Managing Director of the SME Foundation told the FE that the Covid, flood in last year, July-August uprising had mainly affected the growth and production in the SMEs.

If the SMEs are affected, the employment generation as well as the country's development would be hindered, he added.

"The government would have to provide more loans and facilities to the SMEs for their recovery and flourish. Besides, the market linkage, supportive role of the big corporate to the SMEs and facilitation of the technological innovation are imperative to develop the sector," Mr Chowdhury said.​

 

[Saif]

Bangladesh to observe World Accreditation Day with focus on empowering SMEs

CA calls for global action to empower SMEs

www.thedailystar.net

Bangladesh to observe World Accreditation Day with focus on empowering SMEs
CA calls for global action to empower SMEs

Photo: PID

Chief Adviser Professor Muhammad Yunus has called for a collective global initiative to support small and medium enterprises (SMEs), as Bangladesh prepares to observe World Accreditation Day 2025 tomorrow alongside other nations.

According to a statement issued from the Press Information Department (PID) today, this year's theme is "Accreditation: Empowering Small and Medium Enterprises (SMEs)."

"This year's theme of the day appears to me as time befitting," he said, adding that the accreditation system plays a vital role in supporting SMEs by ensuring quality across all levels of the product and service supply chain.

In his message, the chief adviser said he is pleased to know that Bangladesh is participating in the global observance of World Accreditation Day.

"A large part of our gross domestic product (GDP) comes from the SME sector. The role of this sector is also very important in creating new jobs,' he added.

However, the chief adviser acknowledged that SMEs face ongoing challenges such as entry barriers to international markets, evolving consumer demands, and financial limitations.

"A collective global effort is needed to overcome these obstacles," he said.

The chief adviser further said the Bangladesh Accreditation Board, since its inception, has been working towards these goals.

"So far, the board has awarded accreditation to 155 organisations -- including laboratories, diagnostic centres, certification bodies, and inspection bodies -- according to international standards," he said. He also reaffirmed the interim government's commitment to the development of small and medium industries, saying it is "sincere about supporting sustainable industrialisation, trade, and investment for the country's desired development."​

 

[Saif]

Digital finance & policymaking for MSME resilience

Micro, Small, and Medium Enterprises (MSMEs) are the driving force behind many of the large economies worldwide. While their presence serves as a hub for entrepreneurship development in countries like Bangladesh, most of them struggle to access finance. This lack of access hinders their ability to

thefinancialexpress.com.bd

Digital finance & policymaking for MSME resilience

Md Helal Uddin and Sanjoy Pal
Published :
Jun 16, 2025 23:50
Updated :
Jun 16, 2025 23:50

Micro, Small, and Medium Enterprises (MSMEs) are the driving force behind many of the large economies worldwide. While their presence serves as a hub for entrepreneurship development in countries like Bangladesh, most of them struggle to access finance. This lack of access hinders their ability to sustain growth and ensure success, even when they have the potential for a significant positive impact. Enterprise data and access to necessary funding can be effectively integrated into digital finance platforms. Digitisation of financial services helps banks or financial institutions transform their financing processes. The advancement of financing process innovation has entered a new era through the utilisation of digital technology, where both borrowers and financiers can benefit from credit scoring–based assessment processes. The credit scoring method evaluates a prospect in the shortest possible time, allowing prospective borrowers to know their scores and the assessment criteria on which the lending amount is determined. In this system, prospects are aware of the indicators on which they have been evaluated and scored.

The platform of Industry 4.0 incorporates digital lending as part of embedded finance for financiers. As a component of embedded finance, digital credit scoring involves machine-based processes that help minimise time and costs compared to conventional credit scoring methods. Almost all countries around the world use credit scoring methods to assess individuals and micro or small businesses for loans to meet their liquidity needs. Some rely on traditional credit scoring methods, while others implement digital credit scoring systems. Traditional methods involve collecting data physically and relying on paper-based documents, as the necessary digital infrastructure is not yet in place. In such cases, financiers often rely on visual assessments of prospective borrowers to judge their creditworthiness. This approach entails high costs and significant time to serve borrowers. As a result, borrowers are sometimes denied the necessary funds and may remain unaware of the reasons behind the rejection. In contrast, the digital ecosystem – comprising technology, channels, customers, strategy, and culture – has made life easier for all stakeholders.

According to LeewayHertz, an AI development company, AI-based credit scoring enables creditors to make informed lending decisions by evaluating the creditworthiness of prospective borrowers. They identified several areas where AI-based credit scoring is applied—not only in credit assessment, determining loan interest rates, and setting credit limits for individuals and small businesses, but also in determining insurance premiums, risk management, portfolio analysis, financial planning, counselling, behavioural analysis, customer segmentation, internal and regulatory compliance, credit score simulation, default risk prediction, early warning signals, peer-to-peer lending, and financial health monitoring. These applications are briefly outlined below:

AI-driven credit scoring is one of the most effective approaches to digital credit scoring. Here, AI algorithms uncover a multitude of available data about a prospect through numerical representation. The scoring mechanism considers factors such as credit transaction history, credit utilisation, search history, web activity, and interests to assess a prospect’s financial behaviour by analysing data retrieved from credit bureaus.

The final score, derived from the multiplication of weightings with individual components, enables a lender to determine the credit limit, loan terms, interest rates, tenure, repayment methods, and more. AI-driven credit scoring also utilises alternative data drawn from social media profiles, online shopping behaviour, utility payments, educational background, and other sources. In contrast, conventional methods rely on primary data to evaluate a prospective borrower’s creditworthiness, such as physical site visits, face-to-face interviews, direct net worth calculations, stock verification, and so on.

These differences reflect the intricacies of AI-based credit scoring. In traditional financing methods, lender bias may lead to both over-financing and under-financing of a borrower—each carrying significant risk for an organisation. Data manipulation is easier in conventional systems, whereas the integrity of alternative data in digital systems is more secure and less prone to tampering. This ensures greater accuracy in finalising credit structures and loan terms, thus helping reduce the financing gap.

In this system, borrowers can also be informed of the specific reasons behind credit limit determinations. Through data integration, AI-based credit scoring alerts borrowers about the usage of borrowed funds, thereby controlling non-performing activities. Under a digital ecosystem, borrowers are aware that all information gleaned from them is used to generate alternative data. By providing this data, technology drives global interconnectivity. As a result, investors can gain a competitive edge in the global marketplace.

In developing economies worldwide, there are numerous MSMEs that significantly contribute to employment creation, value addition, economic resilience, innovation, and competitiveness—both domestically and globally. The best outcomes from this sector depend on the vitality of a robust and competitive MSME environment.

To ensure the sustainability of MSMEs in Bangladesh, the government should formulate innovative policies to enable entrepreneurs to operate competitively within a digital landscape. Simultaneously, access to finance must be ensured through banks and non-bank financial institutions (NBFIs). Inclusion will be enhanced when MSMEs operate under a digital ecosystem, which will, in turn, strengthen the availability and reliability of alternative data. By doing so, financiers will be able to assess MSMEs more efficiently, leading to quicker lending decisions—enabled by the digitalisation of financial services, or digital finance. At this point, it is imperative to generate innovative ideas and implement comprehensive policies at entrepreneurial, institutional, and economic levels to make the MSME sector more vibrant and future-ready.

Dr. Md Helal Uddin is the Secretary General of Bangladesh Chamber of Industries (BCI), and Sanjoy Pal is a seasoned banker and Financial Modeling & Valuation Analyst (FMVA®) certified from Corporate Finance Institute, Canada.​

 

[Saif]

Lack of information, investment take toll on SME exports

The lack of information and proper investment was taking a toll on the export potential of the country’s small and medium enterprises sector...

www.newagebd.net

Lack of information, investment take toll on SME exports
Saddam Hossain 23 June, 2025, 22:54

The lack of information and proper investment was taking a toll on the export potential of the country’s small and medium enterprises sector.

Industry insiders said that, although the sector employs more than 25 million people, the export earnings from this sector remain unknown, as there is no dedicated category for it.

Moreover, insiders also stated that the complexity of obtaining certificates, identifying and selecting suitable information on external markets, and developing overseas contracts was a hindrance to entering export markets.

Shopna Rani Sen, the owner of jute and jute goods manufacturer Rangpur Craft, which exports items to the UK, Germany, and some Asian countries,

Talking to New Age, she said that due to the lack of paperwork, such as licenses and certificates, and proper information, several SME entrepreneurs couldn’t enter the export market on a large scale.New age fashion

‘We couldn’t contact the buyers properly. Moreover, the issue at the outside of Dhaka is even worse,’ she added.

Moreover, the entrepreneurs also have some shortcomings, such as production capacity, she added, noting that if a buyer ordered a bulk import, they couldn’t fulfill the orders due to a lack of production capacity.

‘The entrepreneurs also have reluctance in exporting due to those mentioned reasons. Moreover, lack of investment and finance are also responsible,’ she added.

According to the International Finance Corporation, the SME sector faced a financing gap of $2.8 billion.

Md Oili Ullah, owner of Janata Engineering, told New Age that, apart from the information gap, one of the major problems facing SME exports is product quality.

‘Our entrepreneurs primarily focus on domestic market as they have lack of knowledge about global market. As there isn’t enough investment and banking support, we can’t import updated machinery,’ he added.

For this reason, the quality of the products did not meet the global standard.

‘The government should take policy on this, especially in smoothness of information and certification and access to finance,’ he added.New age fashion

He also said that the they have to pay more tax, ranging 27 per cent-60 per cent, in importing capital machinery and raw materials, which more than the finished products.

Rehana Akter, owner of Clay Image, a craft enterprise, told New Age that the interruption in gas supply also impacted them.

‘Sometimes we get big orders from our buyers but we couldn’t receive those as we haven’t enough capacity,’ she added.

She also said that the complexity in the documentation, proper information, and certificates were also hampering their export aspirations.

According to data from the Export Promotion Bureau (EPB) and the National Board of Revenue (NBR), Bangladeshi exporters export about 800 types of products to more than 100 countries.

However, there is no comprehensive data specifically on SME exports.

The industry insiders said that the sector accounted for about 25 per cent of the country’s total exports and about 1,500 enterprises were currently involved with exports.

In the financial year 2024-25, Bangladesh exported goods worth $44.46 billion to its global destinations.

Bangladesh Bureau of Statistics (BBS) figures showed that there were over 7.8 million cottage, micro, small and medium enterprises (CMSMEs) across the country, making up more than 99 per cent of all industrial enterprises.

The sector provided about 85 per cent of jobs in the industrial sector, employing more than 25 million people, said the BBS.

The sector contributed 28 per cent of the country’s total GDP.

The SME Foundation also acknowledged the challenges the sector faced over the years.

They said that due to the limited access to finance, lack of knowledge and skill regarding export process, customs, e-commerce and marketing, and global standards, the sector lagged.

Moreover, they have also lack knowledge in packaging, labeling, and traceability.

Recently, the foundation has taken an initiative titled Readiness for Internationalization through Skill Enhancement (RISE) through which it would enhance skills, knowledge, and business networking to increase SME exports.

Speaking to New Age, Md Anwar Hossain, vice president of the EPB, said that they are conducting major work to fill the gap in SME information and support market expansion.

Once the work is completed, the SME sector would benefit from certifications, information, import of raw materials, and other facilities related to export.

Speaking to New Age, Prof. Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), said that SMEs in Bangladesh have untapped potential for export growth.

He said that the government should provide proper facilities to SMEs that want to export, including building a comprehensive database, conducting market-based research for SME entrepreneurs, and supporting their product lines.

He also urged the government to address the common hurdles that SMEs face, such as difficulties in accessing finance, cumbersome paperwork, technological shortcomings, and a lack of competitiveness.​

 

[Saif]

MSMEs face financing gap of $2.8 billion

Micro, Small, and Medium Enterprises (MSMEs) Day 2025 will be observed in Bangladesh today (Friday) along with the rest of the world. Recognising the critical role of MSMEs worldwide, the United Nations (UN) announced June 27 as the International MSME Day in 2017. The theme of the MSME Day 2025 i

thefinancialexpress.com.bd

MSMEs face financing gap of $2.8 billion
MSME Day today

FE REPORT
Published :
Jun 27, 2025 08:40
Updated :
Jun 27, 2025 08:40

Micro, Small, and Medium Enterprises (MSMEs) Day 2025 will be observed in Bangladesh today (Friday) along with the rest of the world.

Recognising the critical role of MSMEs worldwide, the United Nations (UN) announced June 27 as the International MSME Day in 2017.

The theme of the MSME Day 2025 is "Enhancing the role of MSMEs as drivers of Sustainable Growth and Innovation".

The MSMEs Day 2025 provides an opportunity to acknowledge the pivotal role MSMEs play in fostering economic growth, generating jobs, and making the nation resilient and competitive.

In Bangladesh, Cottage, Micro, Small, and Medium Enterprises (CMSMEs) are essential for economic development. They significantly contribute to national income, create jobs, and help achieve Sustainable Development Goals (SDGs) like eradicating poverty, promoting gender equality, and empowering women. The government recognises CMSMEs as a key driver of industrialisation.

With approximately 7.9 million SMEs in Bangladesh, CMSMEs contribute about 25 per cent to the national economy and generate 40 per cent of overall employment, according to sources. They account for nearly 80 per cent of total industrial employment and about 90 per cent of industrial units in the country, adding 45 per cent value to the manufacturing sector. Despite their vital role, CMSMEs face a financing gap of US$ 2.8 billion, with only 10 per cent accessing bank finance.

ILO Director-General Gilbert F. Houngbo highlighted the crucial role of MSMEs in creating jobs and advancing social justice.

He calls for bold, coordinated action to empower MSMEs through inclusive policies, better access to finance, skills, innovation, and decent work.​

 

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Strong SMEs stressed to foster economy

A strong and globally standard small and medium enterprises sector is a must to foster an innovative, inclusive and sustainable national economy, said experts...

www.newagebd.net

Strong SMEs stressed to foster economy
Staff Correspondent 29 June, 2025, 19:58

Chief adviser’s special envoy for international affairs Lutfey Siddiqi, BIDA executive chairman Chowdhury Ashik Mahmud Bin Harun, CPD distinguished fellow Debapriya Bhattacharya, SME Foundation chairperson Md Musfiqur Rahman, managing director Anwar Hossain Chowdhury, industries secretary Md Obaidur Rahman and ILO Country Office, Bangladesh officer in charge Pedro Jr Bellen are present at an event marking the International MSME Day 2025 in the capital Dhaka on Sunday. | Press release

A strong and globally standard small and medium enterprises sector is a must to foster an innovative, inclusive and sustainable national economy, said experts.

They also said that sufficient governmental supports and a strategic priority of industrial policy were mandatory to strengthen the capacity of the SME sector of the country.

They were speaking at an event celebrating International MSME Day 2025, organised by the SME Foundation in cooperation with the International Labour Organisation in the capital Dhaka on Sunday.

At the event, Lutfey Siddiqi, special envoy for international affairs to the chief adviser, said that the government will provide all necessary support to youths, who can harness their skills to become SME entrepreneurs.

He said that prioritising small and medium-sized enterprises sector and entrepreneurial development was important in the country’s current economic strategy.

Lutfey Siddiqi said that if the entrepreneurs could maintain global standards, their businesses would be competitive.

‘Strengthening global networking is essential for the development of the MSME sector to increase international access,’ he added.

He stated that, in this regard, entrepreneurs required support in participating in international trade shows, achieving standard certification and receiving incentives to promote export-oriented SMEs, along with access to digital export platforms.

On June 27, Bangladesh observed International MSME Day 2025 with a series of events under theme of ‘Enhancing the Role of MSMEs as Drivers of Sustainable Growth and Innovation. ’

The United Nations designated June 27 as MSME Day in 2017, highlighting the sector’s crucial role in achieving Sustainable Development Goals.

By 2030, the world would need 600 million jobs, with seven out of every ten created within the MSME sector.

Globally, the MSMEs contribute to 90 per cent of businesses, 60-70 per cent of employment and 50 per cent of GDP, the UN said.

In his speech, Chowdhury Ashik Mahmud Bin Harun, executive chairman of the Bangladesh Investment Development Authority, emphasised the importance of strengthening the SME sector to foster an innovative, inclusive and sustainable economy.

‘SME and investment are complementary to each other and through its one stop service centre, the BIDA has brought multifaceted assistance for the sector, including trade licence, VAT and tax registration, investment registration, application for gas, water and electricity and others,’ he added.

He said that the large-scale industrial sector of the country usually faced complexity regarding backward linkage.

‘If we can establish a skilled, innovative and standard SME sector, it would accelerate the competitiveness of large-scale industries,’ he added, saying that strengthening the capacity of the SME sector should be a strategic priority of industrial policy.

SME Foundation chairperson Md Musfiqur Rahman stated that the foundation had served over two million entrepreneurs directly and indirectly since its inception, including 2,50,000 direct beneficiaries, with 55 per cent being women entrepreneurs.

‘Through the Credit Wholesaling Programme launched in 2009, we disbursed over Tk 1,010 crore to nearly 11,000 entrepreneurs, at least 25 per cent of whom are women,’ he added.

He also emphasised the foundation’s ongoing efforts in creating new entrepreneurs, enhancing skills and capacities, promoting ICT-friendly business practices and advocating for policy support to strengthen the SME sector.

However, he noted, due to financial and institutional limitations, the foundation cannot fully meet nationwide demand, highlighting the need for government support.

Meanwhile, the UN also acknowledged that access to finance remained a major challenge, with 41 per cent of entrepreneurs in least-developed countries, 30 per cent in middle-income countries and 15 per cent in high-income countries facing difficulties in obtaining loans.

Centre for Policy Dialogue distinguished fellow Debapriya Bhattacharya said that the SME sector played a pivotal role in the national economy.

He urged political parties to explicitly outline their plans for SME development in their upcoming election manifestos, emphasising that political commitment was crucial for progress in this sector.

Industries secretary Md Obaidur Rahman and Pedro Jr Bellen, officer in charge of the ILO Country Office, Bangladesh, also spoke at the event, where Anwar Hossain Chowdhury, managing director of the SME Foundation, delivered welcome remarks.

On the sidelines of the event, the Asia Foundation organised a daylong product exhibition for women entrepreneurs, where 70 entrepreneurs showcased their products.​

 

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ADB to lend $100m to boost BD SMEs

The Asian Development Bank (ADB) is set to provide a US$100 million loan to support Bangladesh's small and medium-sized enterprises (SMEs), as they are largely deprived of formal lending, officials said on Tuesday. Negotiations between the Bangladesh government and the Manila-based lender are sche

thefinancialexpress.com.bd

ADB to lend $100m to boost BD SMEs

FHM Humayan Kabir
Published :
Jul 23, 2025 09:50
Updated :
Jul 23, 2025 09:50

The Asian Development Bank (ADB) is set to provide a US$100 million loan to support Bangladesh's small and medium-sized enterprises (SMEs), as they are largely deprived of formal lending, officials said on Tuesday.

Negotiations between the Bangladesh government and the Manila-based lender are scheduled for tomorrow to finalise the financial assistance under the proposed "Second Small and Medium-Sized Enterprise Development Project (Phase II)," they added.

"Since SMEs in Bangladesh are often excluded from the country's conventional banking system, the ADB loan will enhance their access to funding, facilitating business expansion," said a senior official of the Economic Relations Division (ERD). "We are hopeful of securing confirmation during the negotiation meeting."

The second phase of the SME Development Project (SMEDP-II) includes a $100 million loan from ADB's ordinary capital resources (OCR). It aims to scale up activities launched under the first phase by increasing the number and size of commercially viable cottage, micro, small and medium enterprises (CMSMEs), and supporting employment in the sector.

In the first phase of the project, ADB provided $200 million, allocating $133.3 million for small enterprises and $66.7 million for medium-sized businesses.

According to ERD officials, the new $100 million loan will be channelled through the Bangladesh Bank (BB) to finance CMSMEs across the country. The Bangladesh Small and Cottage Industries Corporation (BSCIC) and the SME Foundation will work as key implementing partners alongside the central bank.

Out of the total loan amount, BSCIC and the SME Foundation will disburse $66.7 million to support CMSMEs, while the remainder will be distributed through commercial banks and financial institutions.

Despite CMSMEs accounting for nearly 85 per cent of employment in Bangladesh, they remain largely excluded from formal financial services. A World Bank report titled "Financing Solutions for Micro, Small and Medium Enterprises in Bangladesh" estimates a financing gap of Tk 237 billion (US$2.8 billion) in the sector.

The report also notes that 99 per cent of all non-farm enterprises in Bangladesh fall within the micro and small enterprise categories, providing jobs for around 20.3 million people as of 2013. Yet, the sector's access to formal finance remains significantly lower than the South Asian average.​

 

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Digital supply chain finance

The industrial MSME (Micro, Small and Medium Enterprise) is not just a noteworthy economic organ of Bangladesh, but a vital one. They are the key role players of employment generation for populous economies, like Bangladesh and perform as the backbone of the backwards linkage merchants of large cor

thefinancialexpress.com.bd

Digital supply chain finance
Risk sharing facilities for industrial MSMEs

Sanjoy Pal
Published :
Aug 12, 2025 22:54
Updated :
Aug 12, 2025 22:54

The industrial MSME (Micro, Small and Medium Enterprise) is not just a noteworthy economic organ of Bangladesh, but a vital one. They are the key role players of employment generation for populous economies, like Bangladesh and perform as the backbone of the backwards linkage merchants of large corporations. They are also stepping up to innovate new products and processes nowadays. According to a report of the Planning Division, Bangladesh, 90per cent of industrial units represent CMSMEs, with 80per cent of industrial employment contributing 45 per cent of the manufacturing value added to the GDP of Bangladesh. Their importance to the economy of Bangladesh cannot be overstated. However, despite their potential, most of them suffer from a lack of capital support from financial institutions to establish industries. They need to inject their own funds or funds from informal sources to be established. The World Bank, in its publication on "Financing Solution for Micro, Small and Medium Enterprises in Bangladesh", revealed the presence of significant financial infrastructure weaknesses that impede the financial inclusion of MSMEs. The report also recorded a 159th ranking for Bangladesh (out of 190 countries) for the 'Getting Credit' indicator. Due to a lack of awareness about and financial literacy, MSMEs lack financing support from the formal sector. They typically expect to manage the regular cash cycle because they have funding constraints. When they receive a bigger supply order at a time, they fail to get the work done. To meet their emergency working capital or sometimes fixed asset-related requirements, they seek funds from informal sources, bearing huge interest that is burdensome for them to bear. To address the financing gap between both parties and ensure access to finance from the formal sector by Industrial MSMEs, digital supply chain finance to support their cash cycle, and a risk-sharing facility concept should be introduced as advanced financing solutions.

Many industries have been affected by the idiosyncratic negative shocks of the COVID-19 disease since 2019. Some unstable economic and political situations that arise from time to time also make the marginal MSMEs suffer. Furthermore, the US tariff for Bangladesh has led some industries to initiate a refurbished drive as the tariff may cause unexpected changes in market demand for some exported items or may create supply chain disruptions in production. MSMEs are considered the most vulnerable participants in terms of their size, capacity and limited resources. All they need to absorb these shocks is to expand the sources of funding. Here, financing from formal sources, specifically from financial institutions, can create an opportunity for them to sustain in the long run. MSMEs mostly require funds on an urgent basis, where the lead time matters. But due to the process and documentation gap constraints, most of them are apathetic to borrow from Banks and Non-Banking Financial Institutions. They are seeking funds from Micro Finance Institutions, rather than having a 24 per cent interest rate, unlike banks that charge 4 per cent to 15 per cent interest annually. Hence, the banks are not getting access to lend to the marginal MSMEs, and the MSMEs are not getting access to borrow from banks in the expected large amount. The leading economies of the world are mitigating this gap by embracing the digital finance module in their process. What most of the financial institutions in Bangladesh can do is to introduce financing solutions through digital means in their process.

The industrial enterprises seek funding for capital machinery, working capital support, import financing and export financing as well. Most of them are usually MSMEs who play the pivotal role in the supply chain ecosystem. In that case, to roll out the regular operations, they frequently need supply chain financing support from Banks or NBFIs. The manual intervention of the supply chain finance has lost its tradition worldwide. The industries have been utilising the Letter of Credit, Documentary Acceptance and Collection method of supply chain financing in Bangladesh for a long time. To meet the local demand, these methods are considered costly. To alleviate the cost burden, invoice financing, a widely known method of digital supply chain finance, should be made more accessible. Many of the renowned banks of the world, such as Standard Chartered Bank, Bank of America, Lloyds Bank, Arab Bank, DBS Bank, ICICI Bank, etc., have already embraced advanced technologies and implemented digital supply chain finance strategies to create more operating cash flow for industrial MSMEs. The suppliers benefit from the digital chain of financing in several ways. They have zero risk in their relationships, receive online payments that are disbursed quickly and securely, and can upload invoices at any time, either individually or in bulk, through various access points, including computers, mobile devices, and tablets. The buyer can enjoy a one-stop invoice financing opportunity, including fast approval and disbursement through online, automate the payables, track upcoming payment schedules, obtain leverage with suppliers and vendors, etc. In addition to the benefits of suppliers and buyers, the financial institutions will also offer program-based solutions, seamless onboarding of marginal MSMEs, and paperless and hassle-free processing of services to both parties. The potential of digital supply chain finance to meet the working capital requirements by cash flow generation for MSMEs is immense. Proper financing can be a game changer for MSME in Bangladesh, as the Fintech is revolutionising it.

Furthermore, to support the MSMEs in meeting their financing requirements, either for working capital or fixed assets, the central bank, along with some leading financial institutions in Bangladesh, have been encouraging Risk Sharing Facilities (RSFs) for a long time. Bangladesh Bank, having a pilot project funded by the United Nations Capital Development Fund (UNCDF), introduced a risk-sharing facility, a bilateral loss-sharing agreement in the name of the Credit Guarantee Scheme during 2016-2019. Later on, Credit Guarantee was introduced for the pre-financing and refinancing schemes only, which are being continued. Many MSME entrepreneurs have the ability to take calculated risks, but also face funding constraints to mitigate the risks. They want to establish an industry, expand it to enlarge the business scope, but they don't have sufficient collateral to secure financing from the financiers. As a result, many lenders are reluctant to take the risk of financing them. The central bank should consider introducing the facility for collateral-free or unsecured portions of financing for productive MSME industries, irrespective of pre-financing or refinancing schemes. Thus, the funding will be inclusive for the industrial manufacturers, leading to intensified local production. To encourage the MSMEs in Bangladesh, International Finance Corporation (IFC) in cooperation with financial institutions operated in Bangladesh like with HSBC Bangladesh, IDCOL, Brac Bank PLC, Eastern Bank PLC has also invested funds in the form of Risk Sharing Facilities (RSFs) to support agribusiness, renewable energy, solar rooftop projects and trade and working capital solutions for MSME commercial and industrial users and exporters in Bangladesh. It's undoubtedly broadening the MSME financing scope and encouraging financial inclusion. Finally, to boost the local industries and to reduce the financing gap, it is now an exigency to promote digital supply chain finance as well as risk-sharing facilities for the MSMEs in Bangladesh.

Sanjoy Pal is a seasoned banker and certified Financial Modeling & Valuation Analyst (FMVA®).​

 

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newagebd.net/post/trade-commerce/282800/london-fair-to-host-bangladeshi-women-led-smes

London fair to host Bangladeshi women-led SMEs
Bangladesh Sangbad Sangstha . Dhaka 21 November, 2025, 22:57

The Bangladesh High Commission in London has announced that the upcoming SME Fair during Heritage Week would serve as a major showcase for talent, highlighting the creativity of Bangladeshi women entrepreneurs and the innovation of British-Bangladeshi women-led businesses.

The disclosure came as high commissioner Abida Islam held a ‘productive and wide-ranging’ discussion with the UK Trade Envoy to Bangladesh Baroness Rosy Winterton and UK high commissioner to Bangladesh Sarah Cook in London on Thursday.

According to a message received on Friday, the dialogue covered key issues of mutual interest and reaffirmed both sides’ commitment to strengthening the dynamic Bangladesh–UK partnership.

Preparations are now underway for the SME Fair, scheduled to be held on December 13-14, 2025 at Tower Hamlets as part of Heritage Week.

The High Commission said that the fair would offer women-led SMEs a valuable platform to gain international exposure, forge new business connections and celebrate their contribution to economic growth and shared cultural heritage.

It encouraged members of the community to attend and support the participating entrepreneurs, noting that Heritage Week would also celebrate Bangladesh’s rich cultural traditions and deepen community and business ties.​

 

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Bangladesh plans PayPal integration to boost SME market access

Bangladesh is moving to integrate international payment systems such as PayPal to expand global market access for small entrepreneurs and modernise the cottage and small industries sector through stronger digital connectivity, said Bangladesh Bank Governor Ahsan H Mansur yesterday.

www.thedailystar.net

Bangladesh plans PayPal integration to boost SME market access

A smartphone with the PayPal logo is placed on a laptop in this illustration taken on July 14. Photo: REUTERS/FILE

Bangladesh is moving to integrate international payment systems such as PayPal to expand global market access for small entrepreneurs and modernise the cottage and small industries sector through stronger digital connectivity, said Bangladesh Bank Governor Ahsan H Mansur yesterday.

"We have already removed regulatory barriers. SMEs should be able to receive payments seamlessly through platforms like PayPal," he said while addressing the Annual Conference and Workshop 2025 at the Bangladesh Small and Cottage Industries Corporation (BSCIC) headquarters in Dhaka.

Citing global shifts, he highlighted the importance of linking international payment gateways to help local entrepreneurs reach global markets.

He stressed the urgent need to modernise and support small and cottage industries by strengthening supply chains, encouraging integration with larger firms, and building robust digital and sustainable platforms.

"Here, firms try to do everything on their own," he said, attributing part of the challenge to tax complications and policy inconsistencies that hinder both vertical and horizontal integration.

On financing, he criticised the limited scope of BSCIC's loan disbursement.

Only Tk 200-250 crore is being distributed. This should have been much higher, he said, pointing to weak distribution channels and inadequate institutional capacity.

Mansur recommended partnering with microfinance institutions or specialised banks so that loans reach the intended SMEs.

The governor also called for a dynamic online marketplace for BSCIC entrepreneurs, proposing a professionally managed e-commerce platform to directly connect producers with buyers, eliminate middlemen, and ensure fair prices.

"It must be updated continuously and operated professionally. We must invest in quality IT personnel and infrastructure," he said.

Mansur further highlighted the need for stronger demand-side development, warning that increasing supply without corresponding market creation would create inefficiencies.

"Entrepreneurs will suffer if they can't sell. Market access must come first," he said.​

 

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National SME product fair begins today

The 12th National SME Product Fair is set to begin today, highlighting Bangladesh’s growing small and medium enterprise (SME) sector with a focus on expanding market access, fostering innovation, and promoting local entrepreneurship.

www.thedailystar.net

National SME product fair begins today
SME Foundation is organising the 12th edition of the show

An SME entrepreneur is talking with visitors at the SME Fair 2024. Photo: Star/File
The 12th National SME Product Fair is set to begin today, highlighting Bangladesh's growing small and medium enterprise (SME) sector with a focus on expanding market access, fostering innovation, and promoting local entrepreneurship.

Organised by the SME Foundation, the eight-day event will take place at the Bangladesh-China Friendship Conference Centre in Dhaka's Sher-e-Bangla Nagar.

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At its core, the fair aims to provide market exposure for locally produced SME goods, facilitate business networking, and connect entrepreneurs directly with consumers, financiers, and policymakers.

Officials say the initiative is designed not only to showcase domestic products but also to equip SMEs with the tools, knowledge, and financing opportunities needed to scale up in a competitive environment—both locally and internationally.

"Many SME entrepreneurs face challenges in marketing their products despite high-quality production. This fair serves as a platform to bridge that gap," said Md Musfiqur Rahman, chairperson of the SME Foundation, according to a press release issued by the Foundation.

More than 350 SMEs are expected to exhibit at this year's fair, with 60 percent being women-led enterprises.

Exhibitors will span a wide range of sectors, including apparel, handicrafts, leather, agro-processing, ICT services, light engineering, and herbal products, the press release said.

It added that the fair also aims to enhance financial inclusion through daily banker-entrepreneur matchmaking events, where nearly 30 participating banks and financial institutions will guide entrepreneurs on accessing SME loans. In some cases, on-site loan applications may be accepted.

To strengthen knowledge sharing, six thematic seminars will be held between December 8 and 10, covering topics such as export diversification, innovation, halal certification, IP rights, blended finance, and skills ecosystem development. These sessions aim to inform entrepreneurs about regulatory, technical, and financing pathways critical for sustainable growth.

A key highlight of the fair will be the presentation of the National SME Entrepreneur Awards 2025, recognising six outstanding entrepreneurs in the micro, small, medium, and startup categories.

Since its inception in 2012, the SME Foundation has organised 11 national and 93 regional fairs, supporting over 5,000 entrepreneurs. According to the foundation, past fairs have generated Tk 57 crore in direct sales and Tk 93 crore in product orders.

The event's chief patron is The City Bank, with other sponsors including BRAC Bank, Eastern Bank, Bank Asia, IDLC Finance, LankaBangla Finance, United Finance, and IPDC Finance. Only locally produced goods will be allowed for display and sale, with no foreign or imported items permitted.

By combining exhibition, financial support, training, and policy dialogue, the fair continues to position itself as a key national initiative to elevate Bangladesh's SME ecosystem—a sector seen as crucial for job creation, inclusive growth, and industrial diversification.

The fair will remain open to visitors until December 14, from 10 am to 9 pm daily—with no entry fee.​

 

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newagebd.net/post/trade-commerce/284521/experts-stress-new-export-markets-for-sme-products

Experts stress new export markets for SME products
8-day SME Product Fair begins
Staff Correspondent 07 December, 2025, 23:25

Traders and customers pose for a photo during a purchase at a stall of the 12th National SME Product Fair at Bangladesh-China Friendship Convention Centre in the capital on Sunday. | Md Saurav

Experts and entrepreneurs in the small and medium enterprise sector stressed the need to explore new export markets to boost the country’s SME product exports.

They said that regular market research was essential for identifying which countries had high demand for specific products and where new opportunities could be created.

They were speaking at the inaugural ceremony of the 12th National SME Product Fair, an eight-day event, on Sunday at the capital’s Bangladesh-China Friendship Convention Centre.

The fair, organised by the SME Foundation, began under the theme ‘SMEs for Progress and Prosperity’ and will continue until December 14, showcasing 100 per cent locally made products from over 350 SMEs.

Speaking as chief guest, Adilur Rahman Khan, adviser to the Ministries of Industries and Housing and Public Works, urged entrepreneurs to intensify efforts to explore new export destinations.

‘We must strengthen our domestic market while also identifying untapped opportunities abroad,’ he said, adding that regular assessments were needed to understand the products and design trends of specific countries.

He said that product diversification was crucial to strengthening the country’s position across global markets.

‘Globally, SMEs are considered engines of economic growth as they play an essential role in industrialisation, job creation, poverty alleviation and balanced regional development,’ he added.

He said that in Bangladesh, about 99 per cent of all industries fell under cottage, micro, small, and medium category. With relatively low capital, this labour-intensive sector can generate large-scale employment, he said.Travel guide book

He emphasised planned industrialisation instead of setting up factories indiscriminately.

‘Designated industrial zones would allow entrepreneurs to operate with more convenience while protecting the environment and local ecosystems,’ he said, noting that industrial waste must never enter water bodies.

The adviser also said that the SME Foundation must be strengthened structurally and technologically to accelerate the sector’s growth; enhancing budget, human resources, research capacity and technological infrastructure is a priority.

He added that SMEs, clusters and sub-sectors were receiving collateral-free loans at low interest rates, allowing them to compete better and access new markets and that this needed to be expanded so more entrepreneurs can benefit.

At the event, Bangladesh Investment Development Authority executive chairman Chowdhury Ashik Mahmud Bin Harun said that Bangladesh offered immense investment potential.

However, he said, Bangladesh’s business registration process remains complicated and continues to expose entrepreneurs to corruption and harassment; to address this, a unified digital platform is being developed with support from foreign development partners.

‘Through a single app, businesses would be able to access all registration-related services,’ he added.

‘Suppose small entrepreneurs face corruption while seeking government services. In that case, their business structures collapse and that is why the government is working to digitise as many services and processes as possible,’ he added.

The BIDA chief also said that Bangladesh was on track to become the world’s eighth-largest consumer market by 2030 and within the next five years, the local market would surpass the United Kingdom.

He said that foreign investors searched for local partners, while Bangladeshi entrepreneurs sought foreign investors.

‘Matching these two sides is practically difficult and the BIDA has introduced a digital platform where local entrepreneurs can register their business profiles. Foreign investors will be able to identify suitable partners directly through the system, simplifying collaboration,’ he added.

SME Foundation chairperson Md Musfikur Rahman said that the institution needed stronger digital capacity, a comprehensive SME database and an exclusive sales and distribution centre for SME products.

At the event, City Bank managing director and CEO Mashrur Arefin said that high interest rates remained a critical barrier for SMEs; however, without bringing down inflation, there was little scope to reduce them.

He also said that the banking sector was not suffering from liquidity shortages as major banks currently hold around Tk 1.5 lakh crore in excess liquidity and international institutions were prepared to provide substantial foreign currency support.

‘Everyone is waiting for the election and SME lending is likely to rise once investment picks up after the polls,’ he added.

As part of the day’s event, six winners of the National SME Entrepreneur Award 2025, from the micro, small, medium and start-up categories, received crests and certificates.

Among the 350 SME participants, nearly 60 per cent are women-led. The participants come from sectors including readymade garments, handicrafts, leather and footwear, jute products, agro and food processing, bamboo, cane and wooden crafts, food items, light engineering, jewellery, cosmetics, IT services, herbal products, plastics, electrical and electronics, furniture, and several others, along with government agencies, banks, and financial institutions.

Participants said that they expected a favourable response this year, although visitor turnout was comparatively lower on the first day.​