[🇧🇩] Cottage Industry/SME in Bangladesh

[Saif]

SME and start-up revolution: Can FBCCI become the new engine of growth?

Bangladesh is now standing at a very important economic turning point. The country is preparing to graduate from the least developed country (LDC) category in 2026, and the vision of becoming a developed nation by 2041 is no longer just a political slogan; it is now a real economic goal. However, a

thefinancialexpress.com.bd

SME and start-up revolution: Can FBCCI become the new engine of growth?
Sakif Shamim

Published :
Mar 08, 2026 13:49
Updated :
Mar 08, 2026 13:49

Bangladesh is now standing at a very important economic turning point. The country is preparing to graduate from the least developed country (LDC) category in 2026, and the vision of becoming a developed nation by 2041 is no longer just a political slogan; it is now a real economic goal. However, an important question remains – where will the next engine of economic growth come from? Large industries and export-oriented sectors are certainly important, but sustainable and inclusive growth usually depends on small and medium enterprises (SMEs) and emerging start-up businesses. In this context, the key question is how the country’s top business organisation, FBCCI, can lead an SME and start-up revolution in Bangladesh.

According to the latest Economic Census of the Bangladesh Bureau of Statistics (BBS) conducted in 2013, there are more than 7.8 million economic establishments in the country, and about 99 per cent of them are small and medium enterprises. Later studies and analyses by both government and private organisations show that the SME sector creates more than 80 per cent of total employment in Bangladesh and contributes around 25–30 per cent to the national GDP. Reports from the World Bank and the Asian Development Bank also identify SMEs as one of the main drivers of employment generation and inclusive economic growth in the country.

At the same time, the start-up ecosystem in Bangladesh has grown significantly over the last decade. Data from LightCastle Partners and the Bangladesh Association of Software and Information Services (BASIS) shows that Bangladeshi start-ups attracted around 400 million US dollars in foreign and local investment in 2021 – the highest in the country’s history. Although global investment slowed down in 2022 and 2023, start-up activities in sectors such as fintech, e-commerce, logistics, and health technology have continued to expand.

In reality, SMEs and start-ups are two stages of the same growth cycle. Start-ups are the starting point of innovation, while SMEs expand production and create jobs. However, several challenges still exist. Studies and policy reports from the Bangladesh Bank show that access to financing remains one of the biggest barriers for entrepreneurs. High interest rates, collateral-based lending systems, and long approval processes often discourage many promising entrepreneurs. According to an analysis by the International Finance Corporation (IFC), there is a significant financing gap in Bangladesh’s SME sector, and many entrepreneurs remain outside the formal financial system.

In this situation, the role of FBCCI should not remain limited to being only a representative body of businesses. It can also become a strong policy think tank that supports economic decision-making. In many South Asian countries, leading business chambers actively help governments through research, data analysis, and policy recommendations. In Bangladesh, FBCCI regularly provides pre-budget proposals, but more structured and data-driven work is still needed, especially for strengthening the SME and start-up ecosystem.

First, it is important to create a national SME and start-up data observatory. Such a platform could collect and analyse information about sector performance, financing flows, employment trends, and regional inequalities. Second, FBCCI can play a strong role in promoting alternative financing systems such as venture debt, cluster funds, crowdfunding, and equity investment. The Bangladesh Securities and Exchange Commission (BSEC) has already introduced the SME Board in the capital market to make it easier for small and medium companies to raise funds. However, coordinated support from business chambers can make this initiative much more effective.

Third, skill development and technology transformation are extremely important for the future of SMEs and start-ups. According to the World Economic Forum, in the era of the Fourth Industrial Revolution, it is almost impossible to compete without strong digital skills. Bangladesh’s success in ICT exports and the freelancing sector shows that investment in human capital can bring quick results. FBCCI can help by launching regional skill development programmes, mentorship initiatives, and technology support systems through its member organisations.

Fourth, SMEs and start-ups must also be connected to export diversification. At present, the ready-made garments sector contributes more than 80 per cent of Bangladesh’s total exports, according to the Export Promotion Bureau (EPB). In the long run, such heavy dependence on a single sector can be risky. Therefore, sectors like light engineering, agro-processing, IT services, pharmaceuticals, and the creative economy should receive stronger policy support so that small and medium entrepreneurs can enter international markets and expand their businesses.

Finally, no economic revolution can succeed without good governance and transparency. SME policies, tax systems, and business registration procedures should become simpler and more digital. Bangladesh has previously faced challenges in the World Bank’s “Doing Business” rankings, which clearly shows that improving the overall business environment is still an important priority.

The SME and start-up revolution is not a temporary slogan; it is a long-term structural transformation. If FBCCI goes beyond its traditional representative role and takes leadership in research, policy advocacy, data analysis, and skill development, it can truly become the new engine of economic growth for Bangladesh. Large industries may drive the economy forward, but small and medium enterprises give it life and energy.

The next chapter of Bangladesh’s economic journey will be written by entrepreneurs – people who start small but dream big. To turn those dreams into reality, the country needs strong policies, supportive institutions, and effective leadership. In that sense, FBCCI now has a historic opportunity to transform itself from a traditional organisation into a powerful institutional force for national development.

The new engine of growth may already be forming quietly – in small factories, shared working spaces, or on the laptop of a young entrepreneur. The real question is simple – are we ready to provide the right fuel for that engine?

- Sakif Shamim, a Fellow of Life Management Institute, is the Managing Director of Labaid Cancer Hospital and Super Speciality Centre and Deputy Managing Director of Labaid Group​

 

[Saif]

Solar energy and SMEs

A recent study report on the impact of solar-based power on Bangladesh's small and medium enterprises (SMEs) has captured significant attention, not only for its environmental implications but also for its strong economic cause. Prepared by the Change Initiative, the report suggests that SMEs in Ba

thefinancialexpress.com.bd

Solar energy and SMEs

Wasi Ahmed
Published :
Apr 01, 2026 00:31
Updated :
Apr 01, 2026 00:31

A recent study report on the impact of solar-based power on Bangladesh's small and medium enterprises (SMEs) has captured significant attention, not only for its environmental implications but also for its strong economic cause. Prepared by the Change Initiative, the report suggests that SMEs in Bangladesh could reduce operational costs by 30-50 per cent through decentralised rooftop solar adoption, while simultaneously strengthening their long-term competitiveness in export markets by complying with increasingly stringent environmental standards. These findings were presented at a press conference in the capital, alongside detailed factory-level assessments of energy consumption and carbon emissions across selected SME clusters.

SMEs are the backbone of Bangladesh's industrial economy. They represent over 90 per cent of industrial units, employ around 85 per cent of the industrial workforce, and contribute approximately 25-30 per cent to the national GDP. Despite their central role, SMEs remain highly vulnerable due to their dependence on a fossil fuel-dominated energy system, where nearly 95 per cent of electricity is generated from non-renewable sources. This dependence exposes businesses to fluctuating global fuel prices, supply disruptions and increasing regulatory pressures tied to carbon emissions. In such a context, solar power offers not just an alternative energy source, but a strategic pathway towards resilience and sustainability.

One of the most compelling advantages of solar power for SMEs is cost stability. Traditional electricity costs are subject to frequent changes driven by global energy markets, currency fluctuations, and domestic supply constraints. In contrast, rooftop solar systems provide a predictable and often significantly lower cost of electricity once installed. For SMEs operating on tight margins, this predictability can improve financial planning, reduce risk and free up capital for reinvestment in production, technology upgrades, or workforce development. Over time, the savings generated from solar adoption can substantially enhance profitability and competitiveness.

The study focuses on four key sectors within BSCIC industrial estates -- tannery, plastic manufacturing, plastic packaging and light engineering -- which together account for an estimated 46.99 million tonnes of CO2 equivalent emissions annually. Importantly, these sectors also present significant opportunities for emissions reduction through energy efficiency improvements and solar integration. For instance, plastic manufacturing shows the highest potential, with a possible 33-49 per cent reduction in emissions, followed by tannery and light engineering sectors with 19-33 per cent and 19-31 per cent reduction potential respectively. Even the packaging sector, with relatively lower margins, could achieve a 15-28 per cent reduction.

Beyond cost savings and emissions reduction, solar power adoption can directly influence SMEs' access to international markets. Global buyers, especially in Europe and North America, are increasingly prioritising suppliers that meet environmental, social, and governance (ESG) standards. For export-oriented SMEs, integrating solar energy into their operations can serve as a powerful signal of sustainability compliance, potentially unlocking new business opportunities and strengthening relationships with environmentally conscious clients. In some cases, failure to meet such standards may result in lost contracts or reduced market access, making the transition to clean energy not just beneficial but necessary.

The report highlights the transformative potential of solar deployment in BISCIC estates. By allocating just 10 per cent of BSCIC estate space to solar installations, Bangladesh could develop approximately 57 MW of solar capacity, generating nearly 83,000 MWh of electricity annually and reducing emissions by over 51,000 tonnes of CO2 equivalent each year. This demonstrates that even modest spatial investments can yield substantial energy and environmental returns. Moreover, estate-level solar systems can enable shared infrastructure models, reducing individual investment burdens for SMEs and fostering collective efficiency.

Another critical benefit lies in energy independence. Many SMEs currently rely heavily on grid electricity and, in some cases, costly diesel generators to manage power outages. Solar systems, particularly when paired with battery storage, can provide a reliable backup power source, ensuring uninterrupted operations. This is especially valuable in sectors where production downtime can lead to significant financial losses or damage to materials. By generating their own electricity, SMEs can reduce dependence on external energy suppliers and enhance operational continuity.

However, despite these clear advantages, the adoption of solar power among SMEs faces several barriers, including high upfront costs, limited access to financing and a lack of technical knowledge. The report underscores the importance of supportive policy measures to address these challenges. Tax incentives, subsidies, and innovative financing mechanisms -- such as green loans, carbon pricing frameworks, and philanthropic grants -- can play a crucial role in lowering entry barriers. Additionally, capacity-building initiatives and technical support can help SMEs better understand and implement solar solutions effectively.

Ultimately, the study presents an urgent case for rethinking how SMEs approach energy consumption. With an estimated 14 million tonnes of carbon emissions at stake and a potential 50 per cent reduction in operational costs within reach, the shift towards solar energy represents both an environmental imperative and an economic opportunity. As the lead researcher of the study noted, factory rooftops across the country remain largely underutilised, representing untapped potential for clean energy generation.

Solar power no doubt offers a multifaceted solution for SMEs in Bangladesh -- reducing costs, enhancing competitiveness, improving energy security and contributing to climate goals. With the right combination of policy support, financial innovation and industry awareness, SMEs can transition from being passive energy consumers to active participants in a more sustainable and resilient energy future.​

 

[Saif]

SME Foundation to provide loans worth Tk 125cr

SME Foundation, with the support from the Japan International Cooperation Agency, will provide loans worth Tk 125 crore at an interest rate of 9 per cent to cottage, micro, small and medium entrepreneurs in Bangladesh’s agro-based industries and food processing sector through banks and financial...

www.newagebd.net

SME Foundation to provide loans worth Tk 125cr
Staff Correspondent 01 April, 2026, 02:29

SME Foundation, with the support from the Japan International Cooperation Agency, will provide loans worth Tk 125 crore at an interest rate of 9 per cent to cottage, micro, small and medium entrepreneurs in Bangladesh’s agro-based industries and food processing sector through banks and financial institutions.Human rights reports

To expand its credit wholesaling activities, the foundation signed an agreement with Bangladesh Infrastructure Finance Fund Limited at BIFFL head office in the capital on Tuesday, said a press release.

SME Foundation managing director Anwar Hossain Chowdhury and BIFFL chief executive officer SM Anisuzzaman signed the agreement.

Anwar said that through the agreement, financing would be ensured on easy terms for small and medium entrepreneurs in agro-based industries and food processing through funds from BIFFL’s Food Value Chain Improvement Project.

The project, implemented with financial and technical assistance from JICA, primarily aims to improve food value chain, enhance food security and build capacity of entrepreneurs.

Through this initiative, CMSMEs will be brought under financing coverage, with special priority given to women entrepreneurs.

The financing will cover a wide range of sub-sectors, including processing of fruits, vegetables and spices, rice and pulses processing, edible oil production, seed processing, as well as organic fertiliser and bio-pesticide production.

It will also include wholesale, logistics and retail segments.

In addition, the project will support capital investments, including machinery and equipment, factory infrastructure development, warehouse construction and other necessary supporting infrastructure.

The initiative will also provide technical knowledge, advisory services, and training programmes — particularly to improve food safety standards, such as ISO, HACCP and halal certification.

SME Foundation deputy managing director Md Nazim Hasan Sattar, general managers Mohammad Jahangir Hossain and Md Abdur Salam Sardar, among others, attended the event.

Officials hoped that the initiative would strengthen the country’s food value chain, reduce import dependency, increase export potential and generate employment in rural areas.​