Call for inclusive reforms in CMSME financing policy
BUILD shared findings from a perception survey with bankers, highlighting definitional gaps for informal entrepreneurs and concerns over the lack of recognition of UBID, DBID, and PRA as valid alternatives to trade licenses
Small business leaders and experts have called for inclusive reforms to the financing policy for the Cottage, Micro, Small, and Medium Enterprises sector.
At a policy dialogue organized by the Business Initiative Leading Development (BUILD) and the Bangladesh Bank yesterday, they discussed the CMSME Financing Master Circular 2025, including alternative credit channels, group-based lending, collateral-free loans, extended grace periods, and refinancing schemes for informal, women, and new entrepreneurs.
Representatives from the Bangladesh Bank, BSCIC, PKSF, SME Foundation, Ministry of Industries, and private sector stakeholders joined the session to share insights and implementation challenges.
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BUILD shared findings from a perception survey with bankers, highlighting definitional gaps for informal entrepreneurs and concerns over the lack of recognition of UBID, DBID, and PRA as valid alternatives to trade licenses.
The updated circular allows informal entrepreneurs to access loans up to Tk5 lakh. However, uncertainty around eligibility definitions and documentation remains a barrier to implementation.
While new credit channels such as MFIs are encouraged, loans disbursed through MFI linkage remain ineligible for refinancing under Bangladesh Bank's scheme.
Group lending is allowed for micro and cottage entrepreneurs in clusters of 5–10. Yet, one member's default can disqualify the entire group, raising concerns over practicality.
BUILD also recommended adopting internationally recognized (IWA 34) definitions for informal and women entrepreneurs to standardize access.
SME Foundation's Suman Chandra Saha stressed aligning the Credit Guarantee Scheme with the circular and suggested involving BSEC in equity financing. He also called for a comprehensive SME database.
BSCIC's Mansurul Karim said BSCIC lands could be used as collateral, though BSCIC itself mainly supports industrial entities rather than entrepreneurs.
Women entrepreneurs appreciated the circular's intent but emphasized the need for awareness-building, district-level training, and inclusive access beyond export-oriented sectors.
Bangladesh Bank's Nawshad Mustafa said the circular was developed through wide consultation and remains open to revision. He highlighted the PRA system's growing role in CMSME transactions and called for regulatory clarity in work-order financing.
