SME Foundation, UNDP join forces for blended finance facility, loan expansion for CMSMEs
The state-owned SME Foundation has joined hands with the UNDP to introduce specilal model programmes, including a blended finance facility, in the cottage, micro, small, and medium enterprises (CMSME) sector to support entrepreneurs.
Blended finance is a mechanism that combines development assistance with other private or public resources to leverage additional funds.
Currently, only 9% of the country's CMSME entrepreneurs are under bank loan coverage. Under the said approach, it will be expanded and support will be extended to entrepreneurs currently facing risks from climate change effects.
Keep updated, follow The Business Standard's Google news channel
This was disclosed at a workshop at a city hotel today, co-organised by the SME Foundation and UNDP, with the foundation's Chairperson Md Mushfiqur Rahman present as the chief guest.
Citing the 2013 Economic Survey, organisers say 70% of the country's more than 78 lakh CMSME enterprises are outside Dhaka.
Of the 78 lakh enterprises, only 6.79 lakh have received loans worth a total of Tk1.7 lakh crore, the latest Bangladesh Bank data shows. As such, 91% of entrepreneurs have not yet come under the loan umbrella despite various initiatives by banks, and financial and microfinance institutions.
Before implementing the model programmes, the actual CMSME scenario has already been examined through visits to various climate-sensitive areas of the country. Also, views have been exchanged with relevant stakeholders including entrepreneurs, said organisers.
Under the programmes, entrepreneurs will also be trained to enhance their loan repayment skills. Also, guarantee schemes, insurance, and grant assistance will be provided to entrepreneurs affected by climate change effects.
At present, the SME sector accounts for approximately 32% of the national economy.
According to the 2013 Economic Survey of the Bangladesh Bureau of Statistics, 78 lakh CMSMEs constitute over 99% of the country's total industrial enterprises.
Besides, SMEs constitute around 85% of the total employment in the industrial sector, with more than 2.5 crore people employed in the sector.
