Southeast Bank PLC enhanced its efforts to expand its Small and Medium Enterprises (SME) portfolio treating it a national economic priority.
The bank's Head of SME and Agri. Credit Division Mohammad Ashikuzzaman Khan shared this information in an interview with the Financial Express (FE) recently.
SMEs create a substantial share of new jobs, particularly for youth and women, while supporting economic activities beyond major urban centres. As these businesses grow, they strengthen supply chains, increase production, boost exports, and contribute meaningfully to GDP, he said.
"The SME sector plays a vital role in ensuring Bangladesh's sustainable economic growth. Therefore, supporting SMEs is not only a banking priority but also a national economic priority," he said.
About the products the bank is currently offering to MSME entrepreneurs, he said they offer a comprehensive range of SME financing solutions, including working capital finance, term loans for business expansion, trade finance, and collateral-free loans for eligible entrepreneurs. They also provide tailored financial solutions for women entrepreneurs.
Recently, he said, the bank redesigned its SME loan products to make financing more accessible, including offering loans at concessional rates under Bangladesh Bank refinance schemes. Through their products, nationwide branch network, and technology-driven services, they are helping SME customers access finance more conveniently while supporting their sustainable growth and contribution to Bangladesh's economy.
About the current status of loan repayment rates and non-performing loans (NPLs) in the SME sector, Mr. Ashikuzzaman Khan, also a executive vice president of the bank, said the repayment performance of SME sector has generally remained resilient despite recent economic pressures, although NPL levels have increased in some segments due to inflation, higher input costs, and market volatility. However, it is important to recognise that SME loans are typically well diversified across thousands of borrowers, which helps distribute risk.
In contrast, he said, a single large corporate default can have a much greater impact on a bank's asset quality. While SME financing requires closer monitoring and relationship-based banking, recovery rates are often encouraging because entrepreneurs remain actively engaged in their businesses and committed to sustaining operations. Therefore, with proper credit assessment, monitoring, and support, SMEs continue to represent a balanced and sustainable lending segment for banks in Bangladesh.
About the risks and recovery dynamics of MSMEs financing, he said small entrepreneurs are the backbone of Bangladesh's economy, yet many still face challenges in accessing formal finance due to collateral requirements, complex documentation, and lengthy procedures.
To address these barriers, he said the bank offers collateral-free and credit guarantee-based lending, simplify loan processes, leverage digital financial services, and adopt alternative credit assessment methods.
At the same time, he said, enhancing financial literacy and providing dedicated SME support will help entrepreneurs become more bankable. By making finance more accessible and inclusive, they can empower small businesses, create employment opportunities, and contribute to sustainable economic growth.
Regarding special products for women entrepreneurs, young entrepreneurs, and rural SMEs, the bank's SME head said they have dedicated financial solutions for women entrepreneurs, young entrepreneurs, and rural SMEs.
"For women entrepreneurs, our Southeast Shuprova programme offers financing at a 5.0 per cent interest rate, faster processing, and advisory support to help women-led businesses grow with confidence," he said.
For young entrepreneurs, he informed that they provide startup-friendly financing and mentorship opportunities to encourage innovation and job creation. The bank's SME products are also designed to support rural enterprises by ensuring easier access to finance, simplified procedures, and greater financial inclusion in underserved areas.
"Our objective is to empower these priority segments and contribute to the country's economic development," Mr. Khan said.
About the challenges the entrepreneurs face and measures to reduce the barriers, he said they are leveraging digital banking, agent banking, and technology-driven solutions to make SME financing faster, simpler, and more accessible. By introducing online credit assessment and paperless processing, they reduced turnaround times and documentation requirements.
The agent banking network extends financial services to rural and underserved entrepreneurs, while partnerships with fintech companies enable seamless onboarding and digital payment solutions. "Our goal is to ensure that SMEs can access finance conveniently and efficiently, regardless of their location," he said.
About the initiatives the bank undertaking to make MSME financing easier through technology-based services, Over the next five years, Bangladesh's SME sector will have significant opportunities driven by digital transformation, expanding domestic consumption, export diversification, and the growth of women and youth entrepreneurship.
However, key challenges remain, including access to affordable finance, rising business costs, informality, and adaptation to technological change. "As a bank, we see our role in supporting SMEs through tailored financing, digital banking solutions, capacity building, and stronger financial inclusion so that they can become a major engine of sustainable economic growth and employment generation," he said.
Strengthening Bangladesh's SME sector requires a coordinated approach from the government, regulators, and financial institutions. The government can support SMEs through improved infrastructure, formalisation incentives, and business-friendly policies, while regulators can promote enabling frameworks such as credit guarantees, alternative credit assessment models, and digital financial services, he said.
He also added that financial institutions, on the other hand, must expand access to affordable finance, leverage technology to accelerate lending, and provide advisory support to entrepreneurs. Together, these efforts can create a more inclusive and resilient SME ecosystem that drives sustainable economic growth and employment generation.
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