Staff Reporter :
The Asian Development Bank (ADB) is set to provide $200 million as loans to the country’s small and medium enterprises (SMEs) in rural areas to help them gain eligibility to access to the medium-to long-term credit.
According to an ADB release, the credit facility will target particular SMEs, run by women, who are mostly engaged in survival trade and retail activities, and are typically less educated and have less access to SME finance than men.
The project also includes $2 million in technical assistance from the Japan Fund for Poverty Reduction to help establish incubation facilities at educational institutions to promote entrepreneurship, and support entrepreneurs’ development units at Bangladesh Bank.
It will also set up dedicated women’s desks in financial institutions, and strengthen the capacities of women entrepreneurs in accessing available credit facility through financial and legal literacy as well as in managing their enterprises.
This assistance will help in the development of SME clusters to boost their capacity to access bank financing and strengthen the backward
and forward links of SMEs to the formal sector, particularly the larger export-driven industries.
“Many rural firms run by women need financial support but struggle to get loans from banks. That means both they and the Bangladesh economy lose out,” Principal Financial Sector Specialist, in ADB’s South Asia Regional Department, Peter Marro, said.
“We want to help cottage industries and SMEs expand and flourish, including those operated by women.”
Loans will be targeted at small firms outside of the metropolitan areas of Dhaka and Chittagong, with at least 15 percent allocated for women entrepreneurs.
There are about 7.2 million SMEs in Bangladesh. They account for 90 per cent of all companies and employ 70 to 80 per cent of the nonagricultural workforce in Bangladesh.
In 2014, SMEs contributed 25 per cent of Bangladesh’s gross domestic product and 40 per cent of the manufacturing output.
SME growth is constrained by the inadequate access to finance and power and energy, poor transportation, increasing labor costs, and lack of skilled manpower, especially in rural areas.
The Asian Development Bank (ADB) is set to provide $200 million as loans to the country’s small and medium enterprises (SMEs) in rural areas to help them gain eligibility to access to the medium-to long-term credit.
According to an ADB release, the credit facility will target particular SMEs, run by women, who are mostly engaged in survival trade and retail activities, and are typically less educated and have less access to SME finance than men.
The project also includes $2 million in technical assistance from the Japan Fund for Poverty Reduction to help establish incubation facilities at educational institutions to promote entrepreneurship, and support entrepreneurs’ development units at Bangladesh Bank.
It will also set up dedicated women’s desks in financial institutions, and strengthen the capacities of women entrepreneurs in accessing available credit facility through financial and legal literacy as well as in managing their enterprises.
This assistance will help in the development of SME clusters to boost their capacity to access bank financing and strengthen the backward
and forward links of SMEs to the formal sector, particularly the larger export-driven industries.
“Many rural firms run by women need financial support but struggle to get loans from banks. That means both they and the Bangladesh economy lose out,” Principal Financial Sector Specialist, in ADB’s South Asia Regional Department, Peter Marro, said.
“We want to help cottage industries and SMEs expand and flourish, including those operated by women.”
Loans will be targeted at small firms outside of the metropolitan areas of Dhaka and Chittagong, with at least 15 percent allocated for women entrepreneurs.
There are about 7.2 million SMEs in Bangladesh. They account for 90 per cent of all companies and employ 70 to 80 per cent of the nonagricultural workforce in Bangladesh.
In 2014, SMEs contributed 25 per cent of Bangladesh’s gross domestic product and 40 per cent of the manufacturing output.
SME growth is constrained by the inadequate access to finance and power and energy, poor transportation, increasing labor costs, and lack of skilled manpower, especially in rural areas.
