NCC Bank has placed CMSME financing at the centre of its business strategy and offers a diversified range of financial products and services tailored to meet the evolving needs of entrepreneurs.
The bank currently offers eight specialised loan products designed for Cottage, Micro, Small and Medium Enterprises (CMSMEs). These include working capital finance, term loans, trade finance, supply chain finance, women entrepreneur financing, startup support facilities and sector-specific financing solutions.
"Both collateral-backed and collateral-free financing facilities are available depending on the nature, size and business potential of the enterprise," said M. Khurshed Alam, additional managing director of NCC Bank PLC while talking to The Financial Express.
He said NCC Bank also offers two dedicated SME deposit products aimed at encouraging savings and promoting financial inclusion among entrepreneurs.
The bank actively participates in refinance and pre-finance schemes introduced by Bangladesh Bank, enabling entrepreneurs to access funds at competitive rates.
"Eligible customers can also avail themselves of Bangladesh Bank's Credit Guarantee Scheme, which helps entrepreneurs without sufficient collateral obtain formal financing," he said.
As a recent initiative, NCC Bank successfully organised Entrepreneurship Development Programmes (EDPs) under Bangladesh Bank's Skills for Industry Competitiveness and Innovation Programme (SICIP) in Mymensingh and Tangail.
The bank has also strengthened partnerships with SME Foundation and PKSF to expand financing opportunities for underserved entrepreneurs. Furthermore, NCC Bank is in the process of implementing Hub-Based SME Banking to ensure faster, specialised and more efficient service delivery.
In the recent interview with FE Mr. Alam said the repayment behaviour of SME borrowers in Bangladesh has generally remained encouraging, particularly among genuine entrepreneurs who maintain close relationships with their financial institutions.
"At NCC Bank, prudent credit assessment, continuous customer engagement and effective monitoring have enabled us to maintain a healthy CMSME portfolio with comparatively lower levels of non-performing loans," he said.
From a risk perspective, SME financing is inherently different from large corporate financing. Individual SME loans are relatively small in size and highly diversified across sectors, geographical locations and customer segments. As a result, concentration risk in the SME portfolio is significantly lower than that of large corporate lending.
In contrast, large corporate loans involve higher ticket sizes, and any deterioration in a single large exposure can substantially affect a bank's overall asset quality. Although SME borrowers may occasionally face temporary business challenges, their repayment behaviour is often more resilient due to the personal involvement of entrepreneurs in their businesses.
"Recovery management in the SME segment generally requires close relationship management, regular field visits and timely business support. While recovery efforts may involve a larger number of borrowers, the diversified nature of the portfolio reduces systemic risk. Therefore, with proper credit appraisal, regular monitoring and customer engagement, SME financing can remain both sustainable and profitable," he said.
Mr. Alam described the SME sector as the backbone of Bangladesh's economy and a critical driver of inclusive and sustainable growth. The sector plays a pivotal role in employment generation, poverty reduction, entrepreneurship development, industrialisation and regional economic diversification.
At present, Cottage, Micro, Small and Medium Enterprises contribute around 25 per cent of Bangladesh's gross domestic product (GDP) and account for more than 80 per cent of total employment. The sector has also emerged as an important contributor to industrial output and export diversification through its support for backward and forward linkages across industries.
On access to finance and collateral-related challenges, Mr. Alam said improving financial access for small entrepreneurs requires a combination of policy support, technological innovation and institutional reforms.
Collateral-free and cash flow-based lending models should be expanded further. Financial institutions need to place greater emphasis on business viability, transaction history and cash flow analysis rather than relying solely on traditional collateral.
The scope and coverage of credit guarantee schemes should also be expanded to enable more entrepreneurs without adequate security to access formal financing.
He said documentation and loan-processing procedures should be simplified, particularly for cottage and micro enterprises. Digital customer onboarding, e-KYC, electronic documentation and automated credit assessment can significantly reduce processing time and improve customer experience.
Financial literacy and entrepreneurship development programmes should also be expanded to educate entrepreneurs about banking procedures, financial management and compliance requirements.
"Finally, stronger collaboration among banks, MFIs, fintech companies, SME Foundation and development partners can help create an integrated financing ecosystem for underserved entrepreneurs," he added.
Mr. Alam said NCC Bank recognises women, youth and rural entrepreneurs as key drivers of inclusive economic growth and has undertaken several targeted initiatives to support these segments.
"The bank offers dedicated financing facilities for women entrepreneurs with competitive pricing, simplified documentation requirements and personalised relationship management services. Women entrepreneurs are also encouraged to participate in entrepreneurship development and financial literacy programmes organised by the bank," he said.
For young entrepreneurs and startups, NCC Bank provides customised financing solutions, advisory support and business development guidance to help transform innovative ideas into sustainable enterprises.
"To promote rural entrepreneurship, NCC Bank leverages its extensive network of 142 branches and sub-branches across the country. The bank is also increasingly channeling financing through MFI linkage partnerships, which have been particularly effective in reaching entrepreneurs in remote and underserved areas," he said.
NCC Bank is currently working on implementing Hub-Based SME Banking, which will centralise expertise, improve turnaround time and ensure faster loan processing.
Looking ahead, Mr Alam said Bangladesh's SME sector is expected to become more digitalised, innovative and globally integrated over the next five years.
Major opportunities include rapid digital transformation, the expansion of e-commerce, growing domestic consumption, increasing participation of women and youth entrepreneurs, export diversification and integration into global supply chains.
The government's emphasis on Smart Bangladesh and industrial modernisation will also create significant growth opportunities for SMEs.
However, the sector will continue to face several challenges, including limited access to finance, technological adaptation gaps, low productivity, inadequate infrastructure, rising operational costs, climate-related risks and increasing competition in both domestic and international markets.
"Enhancing productivity, innovation, formalisation and competitiveness will therefore be essential to ensure the sector's sustainable growth," he said.
On coordination between public and private institutions, Mr Alam said strengthening the SME sector requires a coordinated and collaborative approach involving the government, regulators, financial institutions, development partners and the private sector.
"The government should continue implementing SME-friendly policies, improving infrastructure, facilitating market access and promoting entrepreneurship development. Special emphasis should be placed on skill development, technological upgrading and export promotion," he said.
Bangladesh Bank and other regulators can further strengthen refinance, pre-finance and credit guarantee schemes while encouraging digital financial services and innovative financing models. Financial institutions, meanwhile, need to expand collateral-free financing, simplify procedures, adopt technology-based lending solutions and increase investments in entrepreneurship development initiatives.
"At the same time, stronger partnerships among banks, fintech companies, SME Foundation, PKSF, MFIs and development agencies are essential to create a robust and inclusive SME ecosystem. Only through such coordinated efforts can Bangladesh unlock the full potential of its SME sector and ensure sustainable, inclusive and resilient economic growth," he added.
jasimharoon@yahoo.com
© 2026 - All Rights with The Financial Express
