Success of SME financing encouraging

FE Report | Published: March 12, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

At a time of slow credit growth in the banking industry, SME financing has recorded remarkable growth led by the country's SME-heavy banks, banking sources said.
With success in SME disbursement, Bangladesh Bank has increased SME loan disbursement target to Tk. 887.53 billion in 2014 which is 19.63 per cent higher than the target in 2013.
The projected credit growth is promising for SME sector in view of 16.50 per cent private sector credit flow growth announced by Bangladesh Bank in monetary policy for last six month of 2013-14 fiscal year.
Industry insiders view that continuous success in SME financing has prompted the central bank to set higher credit growth for SME than overall private sector credit.
SME disbursement target was Tk. 741.87 billion in 2013 and Tk. 590.12 billion in 2012. Banks and financial institutions surpassed this target.
SME finances covers many non-traditional sectors - agriculture, food processing, light engineering, plastic, handicrafts, poultry, dairy, fishery, feed mill, wood processing, boutique and garments, which helps to boost rural economies and generating employment and self-sufficiency. Ideally, with the wide outreach of SME Unit Offices and SME financing, more and more small entrepreneurs at every nook and corner of the country will realize their dreams. SME sector now contributes to around 25% of GDP and generates largest employment after agriculture.
BRAC Bank, a pioneer of SME Banking and country's leading SME Bank, has disbursed more than Tk. 33.00 billion in 2013 offsetting unrest country situation. Against a target of Tk. 30.00 billion and Tk. 32.00 billion in 2012 and 2011, the bank exceeded target by 21% and 6% respectively.
The bank leads in SME financing, exceeding yearly disbursement target promised to Bangladesh Bank, being the only bank in the industry that maintains SME disbursement at 50% of total loan portfolio.
In the last 12 years of financial inclusion, BRAC Bank has fulfilled dreams of 0.43 million entrepreneurs by disbursing BDT 235.00 billion SME loans- more than 90% being collateral-free - generating over 1.6 million employment.