FINANCING CMSMES IN
BANGLADESH
Understanding the role of finance in
empowering CMSMEs.
MEET OUR TEAM MEMBERS
PRESENTATION TEAM Q\A TEAM
ALI MOHAMMAD SHAFEE SARIKA ISLAM SWARNA MUNTASIR UL KARIM SAMI [Link] MIMI MAMUNUR RASHID
ROLL:2311037127 ROLL:2312537125 ROLL:2310737128 ROLL:2312237124 ROLL:2310137130
M.R. HIRON AHMED SABRINA MUSTARIN KUYASHA SUDESHNA SAHA SRISTI MD. MUNNA MOLLA AMILA MAHI ZAMAN
ROLL:2310937123 ROLL:2312037121 ROLL:2312537122 ROLL:2310137126 ROLL:2312337129
[Link] of CMSME Financing in
Bangladesh
[Link] of the CMSME Loan Portfolio
LIST OF
[Link] Financing Gap in Bangladesh
[Link] of Banks in CMSME Financing
[Link] of NBFIs in CMSME Financing
CONTENTS
[Link] Bank’s CMSME Financing
Targets
[Link] of SMESPD in CMSME Finance
Development
[Link] Access to Trade Finance
[Link] Faced by Banks in CMSME
Lending
[Link] Bank’s Refinance & Pre-
finance Schemes
[Link] Entrepreneurs’ CMSME
Refinance Scheme
[Link] Entrepreneurs’ (Start-Up) CMSME
Refinance Scheme
ALI MOHAMMAD
SHAFEE
ROLL:2311037127
OVERVIEW OF SME
FINANCING IN BANGLADESH
SME financing in Bangladesh means providing
loans and financial support to cottage, micro,
small, and medium enterprises. It is promoted by
Bangladesh Bank to ensure SMEs get enough
funds to grow, create jobs, and support
economic development. SME financing has
become a priority because SMEs are vital for
employment, industrial growth, and poverty
reduction.
GROWTH OF THE SME LOAN
PORTFOLIO IN BANGLADESH
SME loan By June 2023, total SME
disbursement has loans reached BDT 2,950.64
increased steadily billion.
in recent years. This represents 85.23% of
the annual national target
set by Bangladesh Bank.
The growth reflects stronger
financial inclusion and better More banks and
support for rural and small NBFIs are
entrepreneurs. prioritizing SME
financing.
SARIKA ISLAM
SWARNA
ROLL:2312537125
CMSME FINANCING GAP IN
BANGLADESH
There is still a big financing gap in the CMSME sector of
Bangladesh. Even though banks are giving more loans, many
small businesses cannot get the money they need. This
happens because many CMSMEs cannot provide enough
collateral, do not keep proper financial records, or operate
informally. According to IFC, the financing gap is around USD
2.8 billion, which shows how difficult it is for CMSMEs to
access formal loans.
ROLE OF BANKS IN CMSME
FINANCING
Banks provide nearly 95%
of CMSME loans
BRAC Bank & IBBL are major
lenders
Private banks lead CMSME
performance
State-owned banks also
finance CMSMEs
Banks see CMSMEs as a
priority sector
HOW DO BANKS SUPPORT CMSME
FINANCING
Special SME loan products designed for small
businesses
Lower collateral requirements for selected CMSME
loans
Field officers visit entrepreneurs to assist with loan
applications
Faster and simpler loan processing procedures
Training and advisory services for new entrepreneurs
Branch expansion in rural and semi-urban areas to
improve access
MUNTASIR UL
KARIM SAMI
ROLL:2310737128
ROLE OF NBFIS IN CMSME
FINANCING
Provide lease and Support cluster-based
asset-backed CMSMEs (engineering,
financing agro-processing, etc.)
Offer flexible Finance CMSMEs that
repayment options cannot qualify for
bank loans
Increase access to Help expand access to
long-term business finance beyond
financing traditional banks
BANGLADESH BANK’S
CMSME FINANCING TARGETS
To ensure that CMSMEs receive continuous
financial support, Bangladesh Bank has set a
target that all banks and NBFIs must allocate 25%
of their total loans to CMSMEs. This policy
encourages banks to increase lending to small
businesses, especially in rural and underserved
areas. These targets also support financial
inclusion and help small businesses grow.
WHY THESE FINANCING TARGETS ARE
IMPORTANT
Encourages inclusive financial access
Expands lending in rural & underserved areas
Helps develop new CMSME loan products
Ensures fair distribution of loans
Increases opportunities for women and youth
entrepreneurs
Motivates banks to improve service quality for
small businesses
Supports balanced economic growth across all
regions
M.R. HIRON
AHMED
ROLL:2310937123
ROLE OF SMESPD IN CMSME
FINANCE DEVELOPMENT
The SME & Special Programmes Department (SMESPD) works
to improve CMSME financing by creating policies, monitoring
loan activities, and managing refinance programs. It also
supports women entrepreneurs, rural businesses, and new
startups by ensuring that financial institutions follow rules
and provide loans fairly.
WHAT IS TRADE FINANCE FOR
CMSMES
Trade finance includes financial services that help businesses
participate in import and export activities.
CMSMEs often need letters of credit, export loans, and
guarantee support — but they receive a very small share of
these services.
WHY CMSMES FACE PROBLEMS IN TRADE FINANCE
CMSMEs receive High
Limited access to
only 9–10% of trade documentation
L/Cs
finance requirements
Limits participation
Viewed as high- Compliance issues
in international
risk by banks create barriers
trade
SABRINA
MUSTARIN
KUYASHA
ROLL:2312037121
CHALLENGES FACED BY BANKS IN
CMSME LENDING
Banks face several difficulties when providing
loans to CMSMEs. Many small businesses do not
maintain proper financial records or have enough
collateral, making it hard for banks to assess their
creditworthiness. As a result, banks must spend
more time and resources to monitor these loans,
which increases their operational cost.
BANGLADESH BANK’S REFINANCE &
PRE-FINANCE SCHEMES
Provides low-cost Helps reduce loan
funds to banks/NBFIs interest rates
Refinance disbursed: Supports long-term
BDT 24.56 billion business financing
Pre-finance Encourages higher
disbursed: BDT 104.68 CMSME loan
billion disbursement
SUDESHNA SAHA
SRISTI
ROLL:2312537122
REFINANCE SCHEME FOR
WOMEN ENTREPRENEURS
This scheme is run by Bangladesh Bank and helps women
who run small and medium businesses.
The main goal is to reduce the gap between men and women
in getting finance.
Women can get loans Women and banks Bangladesh Bank
at only 5% get a 1% incentive for supports other banks
[Link] scheme timely loan that encourage to
allows simple repayment. give loan women.
collateral.
IMPACT & IMPORTANCE:
The scheme helps more women start businesses
and also helps expand their existing businesses.
For Example, Prothoma Rin is type of microloan
that helps women entrepreneurs to start or
expand their businesses. Moreover, In LFI, 'Pilot
Project 's objective is to facilitate a number of
lagged behind women entrepreneurs.
It creates more jobs in the country.
It supports the growth of Bangladesh’s economy.
Removes financial barriers for rural and urban
women.
THE START-UP REFINANCE SCHEME
This scheme helps first-time entrepreneurs. It provides loans to start a new
business. Loans of up to 2.5 million taka are available with collateral, or up
to 1 million taka without collateral. Borrowers must complete training from
recognized institutions before receiving the loan.
The Government of Bangladesh started a project named “Skills for
Employment Investment Program ” supported by ADB and SDC .Its goal is
to teach skills to young people and new job seekers.
Benefits:
[Link] interest rate is only 7%, so loans are cheap.
[Link] new entrepreneurs start their own businesses, Supports self-
employment and new ideas.
PRESENTATION
CONCLUSION
Financing CMSMEs is important
because it helps small businesses
grow and create jobs.
Better access to finance makes the
whole economy of Bangladesh
stronger.
Q & A ROUND
ANY QUESTIONS?
THANK YOU