Draft SME policy emphasises green financing for sustainable growth  

The draft SME policy proposes expanding green bonds, green equity, orange bonds, angel funds, and crowdfunding to accelerate the growth of the country's Small and Medium Enterprises (SME) sector.

It focuses on supporting eco-friendly SMEs, enhancing financial inclusion for women entrepreneurs, and raising seed capital for innovative ventures and small-scale investments.

The proposed policy aims to simplify SME financing, promote eco-friendly initiatives, economically empower women entrepreneurs, and expand innovative ventures, positioning the SME sector as a key driver of Bangladesh's economic development.

The draft was presented today (22 January) at a workshop titled "SME Policy-2025: Opportunities and Challenges: Role of Media," held at the Economic Reporters Forum in the capital, jointly organised by ERF and the SME Foundation.

The industries ministry is preparing the draft to replace the expired 2019 framework. The SME Foundation emphasises the need for regular funding, to be ensured by the relevant ministries and departments, for successful implementation.

The new policy, set to be implemented from July 2025 to 2030, includes 83 action plans and 310 activities, each assigned to specific implementing agencies and supporting ministries.

Mohammad Jahangir Hossain, general manager of the SME Foundation, presented the keynote speech on the draft policy, highlighting the potential of environmentally friendly financial instruments such as green bonds, green equity, and orange bonds in addressing the SME sector's financial challenges.

These tools aim to simplify and reduce the cost of bank loans for entrepreneurs, he added.

Jahangir noted that launching angel funds and expanding crowdfunding systems would further support small businesses and foster growth.

The policy emphasises the role of the Bangladesh Securities and Exchange Commission in introducing these bonds and funds, with support from Bangladesh Bank, stock exchanges, banks, and financial institutions, he continued.

He said these initiatives are scheduled for implementation between July 2025 and June 2027.

The draft policy proposes developing a startup ecosystem, adopting technology and automation for the fourth industrial revolution, utilising AI tools, formalising the informal SME sector, fostering circular economy-based industries, and raising awareness about the Climate Vulnerability Index.

It also suggests declaring 10 February as MSME Day, introducing SME Champion Awards at divisional and district levels, recognising lending banks, and offering special media recognition.

Md Mushfiqur Rahman, chairman of the SME Foundation, said the Cottage, Micro, Small, and Medium Enterprises (CMSME) sector contributes 28% to Bangladesh's GDP and employs about 85% of the population.

The Foundation is working to develop this sector through various initiatives, including national and regional SME product fairs and special programs for women entrepreneurs.

At the event, Taskin Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), said the SME sector supports around 10 crore people but has not received adequate attention to address its financing challenges.

Key issues include limited financing, high interest rates, and marketing difficulties, with 31 documents still required to secure loans. A specific plan is needed to address these challenges, he added.

Anwar Hossain Chowdhury, managing director of the Foundation, emphasised that the SME Foundation has been operating on its own funds due to a lack of allocated resources for the SME Policy 2019. He stressed the need for adequate funding for CMSME entrepreneurs.

"If successfully implemented, the SME Policy 2025 could increase the SME sector's contribution to the economy to 35%," he added.