Despite supportive policy, SME growth stifled by loan access hurdles: Experts

Despite Bangladesh Bank's supportive policies, the country's micro, small, and medium enterprises (MSMEs) sector is still facing multiple obstacles in securing loans, including cumbersome paperwork, collateral requirements, information gaps, and implementation challenges, said experts at a roundtable.

At the roundtable titled "Access to Finance: Policy to Practice," at the SME Foundation office in the capital on Sunday, they said, despite the hurdles, this sector contributes over one-third of the national economy and remains a major source of employment, according to a press release issued today (25 August).

According to SME Foundation data, the MSME sector contributes nearly 32% of Bangladesh's economy. 

The SME Foundation, with support from the Local Government Division, Swisscontact, and Inovision Consulting, organised the roundtable where representatives from the MSME sector, banks, policymakers, and development agencies deliberated on ways to bridge the gap between policy and implementation in SME financing.

SME Foundation Chairperson Md Mushfiqur Rahman, the chief guest, said that due to a lack of funding, the true potential of nearly 1.18 crore MSME entrepreneurs has not been fully realised.

He urged all stakeholders to support entrepreneurs in overcoming these barriers to boost their contribution to the national economy.

SME Foundation Managing Director Anwar Hossain Chowdhury said that MSMEs form the backbone of the country's economy, and removing obstacles to their growth is essential for making them truly strong.

SME Foundation Deputy Managing Director Farzana Khan noted that although funding challenges for entrepreneurs have been discussed for a long time, very few solutions have been implemented.

Swisscontact Senior Advisor Rukhen Uddin Ahmed suggested exploring alternative financing sources beyond banks and non-bank financial institutions to address the funding gaps faced by MSME entrepreneurs.