Fintech Academy

14/09/2025

The Future of Bangladesh’s CMSMEs

The future of Bangladesh's CMSMEs remains shrouded in uncertainty. Bangladesh’s economic landscape is intricately woven into the fabric of its countless cottage, micro, small, and medium enterprises (SMEs). These enterprises form the backbone of the nation’s economy, contributing significantly to GDP, employment, and export earnings. However, beneath the surface of this vital sector lies a silent struggle, marked by myriad challenges.

Through 11 in-depth interviews with business owners from diverse sectors — including RMG, leather, jute, light engineering, fisheries, agro and food processing, e-commerce, and handicrafts — a clearer picture emerges of the challenges faced by CMSMEs.

Based on these insights, CMSME owners express a mix of hope and apprehension. While some anticipate gradual improvements in their business growth and economy, others harbor concerns about persistent challenges such as rising input costs, supply chain disruptions, and stiff competition.

Key informant interviews with CMSME leaders revealed a shared expectation for stronger government and financial support. While existing incentives have provided some relief, they emphasized the need for increased bank financing, streamlined bureaucratic processes, and enhanced assistance to compete globally.

Market access challenges — ranging from non-tariff barriers to international competition — continue to be an obstacle for expansion, with accessible financing remaining a major hurdle for smaller businesses.

Despite inflation, rising interest rates, and escalating input costs, these resilient entrepreneurs drive growth and innovation across sectors. Looking ahead to 2025, Bangladesh’s economic landscape presents both opportunities and challenges. While optimism surrounds government support, business leaders stress the urgency of favorable policies, reduced operational barriers, and greater global competitiveness.

Political and social uncertainties may impact the business climate, underscoring the need for a stable policy framework to sustain growth.

14/09/2025

13/09/2025

SME sector contributes 30 percent to GDP

Emphasis should be placed on SME sector for job creation and inclusive development

The role of the small and medium enterprises (SME) sector is essential in the economy of any country. This sector contributes significantly to expanding trade and commerce, creating employment, and bringing dynamism to the economy.

he role of small and medium enterprises or SME sector is essential in the economy of any country. This sector makes an important contribution to expanding trade and commerce, creating employment and bringing dynamism to the economy. Since independence, SME entrepreneurs in Bangladesh have played a significant role in various fields including reducing rural poverty. Although there have been discussions about the SME sector, no visible and effective steps have been taken. Only large institutions and the oligarch class were receiving huge loans and government incentives from banks and the financial sector and were enjoying the freedom to loot it. Employment did not increase much as they were smuggling the country's money abroad. Meanwhile, the SME sector, which could have been a major source of employment, was languishing due to the lack of necessary and adequate state and institutional support. A major reason behind the mass uprising of 24 was the lack of employment. A large number of young people are entering the workplace every year in the country, but there are no decent jobs for them. The SME sector can be a good source of decentralization of the economy and employment. That is why the necessary policy support from the government and the facility to obtain loans on easy terms from banks and the financial sector are needed.

Bangladesh is trying to graduate from LDC by 2026. Developing and middle-income countries have been emphasizing the SME sector along with large industries. Moreover, the SME sector also plays a role as a supporting sector for large and heavy industries. Such a scenario can be seen when looking at China and Thailand. Unfortunately for Bangladesh, the SME sector here is facing various obstacles instead of cooperation. Starting from obtaining business licenses, unequal tax rates to the crisis of getting easy credit, this sector is not developing.

Our SME entrepreneurs are creating employment opportunities, but the role of this sector in adding value to manufactured goods is still not as expected. In this case, the complexity of obtaining financing, lack of skills and lagging behind in the use of modern technology are playing a role. The development of the SME sector can be one of the main driving forces in ensuring inclusive growth of the Bangladeshi economy. In addition to eliminating inequality of opportunity, the obstacles to the development of this sector must be removed.

The SME sector contributes about 30 percent to the national GDP. In addition, about 85 percent of the total employment in the industrial sector comes from here, as stated in a recent event by the Industry Advisor. The Industry Advisor said this at the closing ceremony of the 'Buyer-Seller Summit 2025' at the Multipurpose Hall of the Institute of Architects in Agargaon in the capital. The summit was jointly organized by the SME Foundation and the World Bank Group, Bangladesh.

The SME sector can play an important role in reducing the influence of oligarchs in the country's economy. In the past one and a half decades, the country has been run by an oligarch-based growth model. Evidence of the limitations of this model has been found. GDP has grown, but there has been no real development. Employment has not been created in line with GDP growth. Unemployment has not decreased either. We now have to move away from this model and move towards inclusive growth. The small and medium enterprise (SME)-based growth model can play an important role in inclusive development. This model will create new jobs and develop new businesses and trade in the country. The simple meaning of inclusive growth or development is that the number of employment, productive institutions and entrepreneurs will increase in proportion to the achieved growth rate. Inclusion is relative. If instead of three businessmen benefiting from 8 percent growth, 10,000 businessmen benefit and 400,000 jobs are created, it will be much more inclusive. Again, it can be more inclusive growth than this. We must try to move towards the most inclusive growth. The main reason for the economic disaster in the country is that a handful of people are developing here. They have high income and capabilities, which most people do not have. There is no alternative to inclusive growth to overcome this situation. And the SME sector can contribute in this regard.

In fact, the SME industry is the main force behind the country's industrial development. The contribution of SMEs to GDP is about 30 percent, but they are facing various obstacles. Sector stakeholders say that although there are several loan programs for this sector, the expected benefits are not being obtained from them. In addition to loans, SME entrepreneurs also face difficulties in business registration, customs and taxes, import of raw materials, marketing, etc. There are at least five types of problems in financing entrepreneurs in small and medium industries. The problems are high interest rates, obligation to provide collateral, lack of necessary documents, risk-averse attitude of banks and lack of non-bank alternative financing facilities. However, marginal and women entrepreneurs face the most problems with collateral in terms of bank loans. This is a major obstacle for small entrepreneurs. Therefore, it is necessary to provide capital to entrepreneurs, provide collateral-free loans to women entrepreneurs as much as possible, develop technical skills, develop infrastructure and provide policy support for the development of the SME sector. In addition, to further strengthen the position of the SME sector in the international market, it is necessary to bring product diversity. In this regard, entrepreneurs' communication in different markets should be increased.

In the future, post-LDC period, SME entrepreneurs will face capacity constraints, financial and policy support, lack of appropriate infrastructure and skilled human resources. In this situation, it is necessary to formulate and implement effective skill development programs, provide financial and policy support, sign free trade agreements, ensure sustainable development of the infrastructure sector, and ensure uninterrupted gas and electricity connections.

In developing and middle-income countries like China, India, Thailand, and South Korea, a large part of export earnings comes from the SME sector. In China, about 70 percent of exports come from SMEs, in Thailand more than 40 percent, and in South Korea more than 43 percent of exports are through SMEs. On the other hand, despite its large contribution to GDP in Bangladesh, the participation of the SME sector in export earnings is very low. Although there are SMEs in Bangladesh, most of it is limited to the domestic market. There are many sectors including handicrafts, leather, agro-based products, processed food, IT, and e-commerce products that can reach the global market through SMEs. Like in the developed world, some steps can be taken in Bangladesh to increase the share of the SME sector in export earnings, such as increasing support for the production of export-oriented products; Effective training in packaging, branding, achieving international standards; making export finance and export incentives easily available; forming effective business networks and increasing public-private connections.

It has been found that entrepreneurs in the country's SME sector lack financial, technical and skills to expand their businesses abroad. Therefore, emphasis should be placed on conducting research activities at a higher rate to diversify products, expand markets and increase the capacity of SME entrepreneurs. For this, it is necessary to emphasize the technical and vocational education system and explore export markets. In the interest of planning to expand SMEs on a larger scale, those concerned are emphasizing on amending the definition of SME with the aim of developing the country's SMEs and providing financial and policy support to face the post-LDC challenges. Emphasis should be placed on strengthening the supply chain system.

One thing to remember is that in the present era, free flow of information plays a supportive role in the expansion of any sector. Besides, there is no alternative to increasing skills in a competitive market. Therefore, it is expected that if a favorable environment can be ensured for the development of the SME sector, it will complement the further development of this sector.

22/07/2025

The Rise of Vietnam from the Ashes of War” shows how Vietnam has dramatically transformed from a war-torn country into a rapidly developing economy. There are many valuable lessons that Bangladesh can learn from Vietnam’s progress:

Key Lessons for Bangladesh:

1. Focused Economic Reform & Growth:
Vietnam: GDP grew from $14B (1985) to $476B (2024).

Lesson: Bangladesh can focus on consistent economic reforms, trade liberalization, and industrial policy to accelerate its GDP growth.

2. Boost in Exports & Manufacturing:
Vietnam: Exports rose from $2B (1986) to $375B (2023).

High-tech exports form 43% of manufacturing exports.

Lesson: Bangladesh should diversify beyond garments—into electronics, ICT, and high-tech exports.

3. FDI Attraction Strategy:
Vietnam: FDI grew from $0.18B (1990) to $20B (2024).

Lesson: Bangladesh must improve its ease of doing business, infrastructure, and political stability to attract long-term foreign investment.

4. Human Development Improvements:
Poverty: Fell from 14% to 98%, secondary 80% (2024).

Lesson: Bangladesh needs to invest more in secondary and vocational education aligned with job market needs.

6. Electricity & Infrastructure Access:
Vietnam: Electricity access rose from 14% (1993) to ~100% (2019).

Lesson: Ensure reliable, nationwide power and infrastructure to support industry and rural development.

7. Climate & Sustainability Goals:
Vietnam’s Target: Net-zero by 2050, high-income by 2045.

Lesson: Bangladesh, also vulnerable to climate change, should adopt green growth strategies and long-term sustainability goals.

22/07/2025

29 dead and More than 100 wounded after an Air Force F-7 into Milestone School and College & Government has declared a day of national mourning 😭😭

29 people died and more than 170 were injured after a Bangladeshi air force training jet crashed into a Milestone School and College in the suburb of Uttara, causing a huge fire and thick smoke, after the aircraft slammed into a two-storey building.

10/12/2024

Israel has carried out hundreds of airstrikes across Syria, including Damascus

According to Syrian media reports, Israeli warplanes have attacked various parts of the country, including the capital Damascus.

The UK-based Syrian Observatory for Human Rights (SOHR) reported at least 100 strikes by Israeli aircraft on various military targets in Syria.

Local media also reported that a research center for chemical weapons production was among the sites attacked.

Israel says it has taken steps to ensure that weapons "do not fall into the hands of extremists" after the fall of the Assad government.

Meanwhile, the United Nations Security Council is set to meet to discuss the situation in the wake of the fall of President Bashar al-Assad.

SOHR says Israeli aircraft have carried out hundreds of strikes in Syria in the past two days, including on a site in Damascus that Iranian scientists were using to develop rockets.

The attack comes as the UN chemical weapons watchdog has warned that Syria must secure its chemical weapons stockpiles.

According to the United Nations Organization for the Prohibition of Chemical Weapons (OPCW), chemical weapons are defined as chemical substances that are intentionally used to cause death or harm.

The use of chemical weapons is prohibited under international law, even when targeting military installations, because these weapons are spread out and not limited to specific targets.

It is not known how many chemical weapons Syria has or where they are located, but former President Bashar al-Assad is believed to have stockpiled such weapons.

Syria signed the OPCW Chemical Weapons Convention in 2013. A month earlier, such weapons were used in a Damascus suburb. The attack involved a nerve agent. About 1,400 people were killed in that incident.

The horrific images of the attack shocked the world. Western powers said only the government could have carried out the attack. But Assad blamed the opposition at the time.

Despite the destruction of the 1,300 tons of chemical weapons declared by the Syrian government by the OPCW and the UN, chemical weapons attacks continue in the country.

BBC analysis in 2018 confirmed that chemical weapons were used about 106 times in the Syrian civil war between 2014 and 2018.

On Monday, the OPCW said it had been in contact with Syria about the security of chemical weapons and facilities.

Also on Monday, Israel released images of its troops entering the Syrian buffer zone, where UN peacekeepers were stationed.

02/12/2024

White Paper reveals how 15 years of corruption bled the economy🥹🥹

20/11/2024

All Important News of Tuesday
19-Nov-2024

1. Chief Adviser Professor Dr. Muhammad Yunus told the Indian daily "The Hindu" that Dhaka will initiate the process to bring ousted Bangladeshi Prime Minister Sheikh Hasina back from India.

2. The High Court has ordered the formation of a high-level committee to re-evaluate and investigate all agreements made with India's Adani Group for power. The Energy and Mineral Resources Secretary has been instructed to do so.

3. Financial Adviser Salehuddin Ahmed said that although some banks are in financial crisis, No bank will be closed.

4. The Russian Defense Ministry has said that Ukraine has attacked Russia with long-range missiles supplied by the United States.

5. Three High Court judges have resigned. They are Justice Salma Masud Chowdhury, Justice Kazi Reza ul Haque and Justice AKM Zahirul Haque.

6. It has been decided to form a committee within seven working days to consider whether it is possible to convert the government Titumir College into a university. In view of this, the students have suspended their programs.

7. BNP Secretary General Mirza Fakhrul Islam Alamgir has said that if elected, the BNP will form a national government and run the country with everyone.

8. The graduation parade of the 40th BCS (Police) batch of Assistant Police Superintendents of the Bangladesh Police Academy has been postponed again. At the same time, the graduation parade of the 40th batch of cadet SIs undergoing training has also been postponed.

9. Legal Advisor Asif Nazrul said that elections will be held soon after completing the much-needed reforms. At the same time, Some amendments to the International Crimes Tribunal Act will be taken up in the Advisory Council tomorrow.

26/10/2024

Energy, power struggle with $1.75b due

According to BPC sources, Bangladesh imported 48.80 lakh tonnes of refined fuel oil and 13.14 lakh tonnes of unrefined fuel oil in the fiscal 2023-24

The country's energy and power sectors are grappling with a significant financial hurdle as dues approach $1.75 billion, mainly from imports of LNG, fuel oil, and electricity, as well as domestic gas extraction.

According to a recent report by the Energy Division, as of 7 July, the Bangladesh Petroleum Corporation (BPC) owes $230 million, while the Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) owes $780 million.

Of Petrobangla's total dues, $450 million is for LNG imports. Chevron is set to receive $250 million for gas supplied from domestic fields, and the lender International Islamic Trade Finance Corporation (ITFC) will receive $80 million. TBS has obtained a copy of the Energy Division report.

Sources indicate that the BPC and Petrobangla have dues attributed to the dollar crisis. While these organisations have sufficient funds, they struggle to secure necessary foreign currency from the Bangladesh Bank and other banks, which leads to increased debts and penalties.

According to sources at the Power Division, India's Adani Group is owed $600 million for electricity supply, and there is also a $100 million outstanding bill for electricity from Tripura state of India.

Additionally, the Energy Division reports pending bills for coal imports.

On 7 July, the state minister for power, energy, and mineral resources convened a meeting with ministry officials to address the ongoing issues.

Upon Prime Minister Sheikh Hasina's return after the China visit, he intends to brief her on these matters. The state minister also plans to take action to secure the needed foreign currency to settle the outstanding dues.

On 8 July, Energy Secretary Md Nurul Alam told TBS over phone, "More gas has been supplied to the power sector this year, and LNG supply has increased due to lower prices in the spot market, which has reduced pressure on fuel oil.

"As a result, the outstanding LNG import bill has increased. This is normal, and we are taking special initiatives to address it."

Petrobangla Chairman Zanendra Nath Sarker also told TBS on 8 July, "The Bangladesh Bank regularly provides us with foreign currency, and this time, there's a bit more of accumulated dues. We expect the central bank to expedite dollar supply, which will resolve the issue promptly."

He added, "There's no cause for concern. During April, May, and June, gas supply was high due to the summer season, leading to increased cargoes and a rise in outstanding amounts.

"We hope Bangladesh Bank's timely provision of dollars in July will enable us to gradually clear these dues."

The central bank was supposed to provide dollars to Sonali Bank for import of essential products such as fuel oil and LNG. However, since mid-May, the Bangladesh Bank has halted dollar supply in this sector.

An official of Sonali Bank, which handles most government imports, said the central bank has not met the demand for dollars, citing the IMF's reserve requirements. The shortage of dollar supply started to worsen in February and effectively stopped in mid-May, leaving Sonali Bank to face fines from different foreign banks.

Bangladesh is securing a $4.7 billion loan from the IMF, in seven instalments based on meeting specific conditions. These conditions are monitored and reviewed by an IMF delegation that visited Bangladesh in late April.

The IMF delegation scrutinised Bangladesh's foreign exchange reserves, aiming for a target of $20.19 billion by the end of June. The Bangladesh Bank later informed the IMF it could not achieve that goal, so the IMF adjusted the target to $14.75 billion.

The central bank has since cut back on all foreign exchange spending to meet this new target, despite ongoing demand from government and private banks.

Originally, the Bangladesh Bank was supposed to pay $25 million daily for fuel imports. Instead, it instructed Sonali, Janata, Agrani, and Rupali Banks to collect dollars. But, these banks do not have enough foreign currency to cover the full fuel import bill, causing the outstanding amount to increase.

According to BPC sources, Bangladesh imported 48.80 lakh tonnes of refined fuel oil and 13.14 lakh tonnes of unrefined fuel oil in the fiscal 2023-24.

Petrobangla procured 21 LNG cargoes from the spot market by 3 July this year, along with an additional 21 cargoes from Qatar and Oman under state contracts during the same period.

22/10/2024

Bangladesh

10 Immediate Measures to Save Bangladesh’s Economy

1. Government Expenditure Control
2. Rebuilding Forex Reserves
3. Checking Corruption & Money Laundering
4. Inflation Control
5. Banking Sector Reform
6. Government Revenue: Addressing Emerging Concerns
7. Revisiting Disaster Management Framework
8. Performing Right to Information Framework
9. Lowering Gas and Electring Prices
10. Prioritizing Empolyment: Strategy for Disposal of Ticking Timebomb

Sorce: EIB

20/10/2024

Instability

Do have any conspiracy behind apparel sector instability? Garments orders are moving from Bangladesh to various countries including India, Pakistan

Due to political instability, government collapse and labor unrest, concern has arisen over the fact that a part of the purchase order of Bangladesh's manufactured garments has gone to the markets of various countries including neighboring India. This situation is seen as a deep crisis for the country's largest export sector.

A company that mediates between buyers of various foreign brands and garment factories in Bangladesh said that ninety percent of the purchase orders of one of its buyers went to India due to not being able to make shipments on time. Syed Mohammad Zakir, a director of the organization named 'No Exit', told the BBC that customers can return only if the situation improves.

“Many of my orders have been placed in India. A customer who used to work here placed his orders in India due to shipment and delivery issues. If we can improve the situation, the customers will come back again.”

Ashulia, Savar and Gazipur areas of Bangladesh where large garment factories are located are the most affected areas. A worker was also killed in a clash with the joint forces during a period of labor unrest and tension