SMEs seek easier loan access for business expansion

Entrepreneurs in the Small and Medium Enterprises (SMEs) sector have said that they are struggling to expand their businesses due to challenges in obtaining loans and a lack of skilled labour, urging the government to ensure easier access to financing.

"I have many product orders, but I lack the necessary funds to meet customer demand. I need at least Tk5 lakh to expand my business, but I am unable to obtain it," said Nusrat Jahan, owner of BiBir Shinduk, an online business platform, at the SME fair today (17 February).

Truvalu Bangladesh, a consultancy and investment management firm, organised the fair at a city hotel in Dhaka.

Nurrat also said, "Some private banks offer loans but impose complex compliance requirements. They require trade licenses, bank statements, tax certificates, VAT registration, transaction records, and detailed invoices. 

"When I apply for a loan of Tk2 lakh, they demand that I have a stock worth Tk20 lakh. This makes it incredibly difficult to secure financing," she added.

The fair is a part of the "Inclusive Growth: Gender Lens Investing (GLI) Programme in Bangladesh," supported by the Embassy of Switzerland in Bangladesh. 

The event connects banks, investors, and financial institutions with high-potential SMEs in Bangladesh, particularly those led by or benefiting women.

At the event, around 20 entrepreneurs displayed their products, and six entrepreneurs presented their businesses, stressing the need for funding to expand. 

The GLI programme, implemented by Truvalu and supported by the Embassy of Switzerland, aims to promote the growth of women-focused SMEs, startups, and impact enterprises through capacity development and gender-responsive financing.

Another entrepreneur, Nigar Sultana, who runs Onumegha, a women's boutique, said, "I started my business six months ago, and now I need a loan to expand. However, the banks require that we have been running our business for at least three years to qualify for loans."

Sultana further mentioned that some banks offer deposit pension schemes but only lend a portion of the funds at high interest rates. 

"These complexities make it challenging for us to expand our businesses," she added.

Rubina Akter Munni, the owner of Design by Rubina, a leather goods stall, shared similar frustrations. 

She told TBS, "When I approached the bank for a loan, they told me that my transaction history is insufficient for a large loan. How can we grow our business under these circumstances?" 

She added that the Inclusive Growth: Gender Lens Investing (GLI) Programme in Bangladesh is helping entrepreneurs like her better understand how to secure funding and manage risks.

Corinne Henchoz Pignani, deputy head of Mission at the Embassy of Switzerland, emphasised the importance of gender lens investing, saying, "We hope to encourage more access to debt financing and capital for women-led businesses and women-focused enterprises. Studies show that investing in green initiatives not only has social benefits but also contributes to economic growth."