'Importance of SMEs in a developing country like Bangladesh is immense'

Many banks are now shifting their lending focus towards SMEs in the post-pandemic era. What is Islami Bank planning in this segment?

Islami Bank Bangladesh Limited (IBBL) is the largest commercial bank in Bangladesh and the first Shariah-based Islamic bank in South-East Asia. Since its establishment in 1983, the bank's primary goal has been to establish a welfare-oriented Islamic banking system ensuring equity and justice in the field of all economic activities. It holds the distinction of being the country's largest investor in financing SMEs. 

Small and medium enterprises (SMEs) are often the hardest hit when crises emerge, and the Covid-19 pandemic has been no exception. SME businesses have been significantly impacted negatively by the pandemic, experiencing declines in revenue, profit margins and sales volumes. In response, many banks in our country are changing their business policy, with a shift in focus towards supporting SMEs. 

The vision of IBBL includes achieving balanced growth and equitable development through diversified investment operations particularly in the priority sectors and less developed areas of the country and to encourage socio-economic uplift and financial services to the low income community, particularly in the rural areas. Since the inception of this bank, it has been giving priority in financing SMEs.

Following the guidelines and regulations of Bangladesh Bank, IBBL has identified several SME-prone areas where specialised SME/agriculture branches have been established. These specialised branches aim to facilitate potential entrepreneurs' access to financing from the Shariah-based banking sector. The bank intends to open more such branches in other SME-prone areas in future.

Islami Bank has a presence in over 6,000 units across the country. How can the bank use this network to foster entrepreneurship?

IBBL is committed to providing banking services that are purely based on Islamic Shariah, and are transparent and efficient. Our goal is to establish and maintain modern banking techniques, to ensure soundness and development of the financial system based on Islamic principles, and to become a strong and efficient organisation with highly motivated professionals working for the benefit of people based on accountability, transparency and integrity in order to ensure stability of financial systems. 

With 394 branches, 236 sub-branches, 2,697 agent outlets and over 2,960 ATM/CRMs, Islami Bank provides services across the country. 

Islami Bank has been playing a leading role in creating entrepreneurship since its inception. 

The bank is contributing to all kinds of industries through entrepreneurship creation and funding. More than two thousand agriculture-based industries have been developed with the finance of Islami Bank. More than 17 percent of the jute products in the country are produced in institutions financed by Islami Bank. Islami Bank imported 63% of the total fertiliser i.e. worth $712 million, to the private sector for the development of the agriculture industry. 

The bank funded the establishment of over 50 cold storages for storing perishable agricultural goods. Around 900 auto rice mills have been set up with IBBL finance. Islami Bank has invested in setting up the country's first auto rice mill and bran oil mill (rice bran to edible oil factory). It invested in importing all types of light and heavy industrial machinery.

Islami Bank has created 85 lahks direct employment through investment in industries. Not only in light and heavy industries Islami Bank is the highest SME investor bank. More than 6,000 industrial factories are being operated with the financing of Islami bank. Islami Bank is the highest investor in the road transport and shipping sectors of the country. It has provided micro-investments to about 9 lakh marginal families in 32,000 villages to eradicate poverty and empower women.