SMEs key to inclusive, sustainable growth: IPDC

Bangladesh stands at a turning point: Impressive GDP growth and deep poverty reduction will only be meaningful if future progress is both inclusive and sustainable.

Small and Medium Enterprises (SMEs), the engine of the economy and employer of over 80% of the industrial workforce, are vital to achieving this inclusive and sustainable growth.

SMEs drive GDP and employment, yet struggle with limited access to finance. According to the International Finance Corporation, the lending gap amounts to billions of dollars, hindering upgrades in technology, market expansion, and climate-resilient investments. Closing this gap is crucial for sustainable growth.

Greener SMEs immediately benefit from lower costs, improved productivity, and new export opportunities. The Bangladesh Bank has established sustainable finance policies, and international partners are expanding credit guarantees and reducing borrowing costs.

Nonetheless, several barriers persist. Collateral requirements, insufficient market incentives, and limited technical expertise still discourage many SMEs from adopting green practices. Addressing these obstacles will require targeted procurement policies, flexible loans, and accessible training, particularly with a focus on rural enterprises and women entrepreneurs.

Institutions such as IPDC Finance are already demonstrating the potential of inclusive SME financing, supporting over 74,800 small firms and expanding women-focused initiatives. To accelerate progress, policymakers, financial institutions, and development partners must collaborate to scale these models, prioritise tailored support, and remove barriers to green, inclusive finance. Through decisive collective action, Bangladesh can foster resilient, greener communities and ensure SMEs lead the path to sustainable growth.