Lending by banks and non-banks has helped small and medium enterprises (SMEs) achieve considerable growth in the last five years, industry-insiders said.
But to realise the sector's full potential it requires "flexibility" in terms of interest rate, lending conditions and other issues, they said.
The SME and Special Programmes Department of Bangladesh Bank (BB), in a statement, revealed that in 2015 for all of the banks and Non-Bank Financial Institutions (NBFIs), the BB had set annual SME loan disbursement target at Tk 1,045.86 billion, which banks and NBFIs exceeded well by disbursing Tk 1158.70 billion. The disbursement was more than 11 per cent of the target.
Even three years back, the target and disbursement amount was almost half the amount in 2015.
In 2013 and 2014, the loan disbursement target was Tk 741.87 billion and Tk 890.31 billion respectively, up from Tk 590.12 billion in 2012.
In terms of disbursement, Islami Bank Bangladesh Limited (IBBL) tops the list, followed by Social Islami Bank Limited (SIBL) and Al-Arafa-Islami Bank.
Islami Bank against their target of Tk 250 billion disbursed 264.68 billion, which is 5.88 higher than the target, according to the central bank data.
SIBL against their target of Tk 50 billion disbursed Tk 60.66 billion, which is 21.32 per cent more than their target and Al-Arafa-Islami Bank against their target of Tk 40.5 billion disbursed Tk 54.35 billion, which is 34.21 per cent more than the target.
The central bank data showed a total of 31 private commercial banks disbursed Tk 518.96 billion against the target of Tk 457.60 billion.
Nine foreign banks disbursed Tk 10.75 billion against the target of Tk 8.03 billion and eight Islamic banks disbursed Tk 478.51 billion against the target of Tk 407.43 billion.
Five state-owned banks disbursed Tk 106.11 billion against their target of Tk 120.53, billion which is 88.03 per cent of the targeted amount.
Mohammad Masum Billah, Manager of SME Foundation, said though banks and NBFIs are contributing but to get the optimum result, flexibility must be ensured in some important factors including interest rate, mortgage-free loan, loan duration etc.
Mr. Billah said there are six million SMEs in Bangladesh, the majority of which increased over the last five to eight years, where lending of banks and NBFIs have been playing the crucial role.
"If we can harness the potential of SMEs, the sector will be a game changer for the economy. Our excess manpower can be fully utilised, which will ensure the competitive edge of the sector and will play a significant role in our economic development", he added.
Bimol Haldar, Senior Manager of SME banking division of the Brac Bank, said the bank is ready to meet the increasing demand for the SME entrepreneurs.
The bank has different kinds of SME loan products such as Anonno Rin, Apurbo Rin, Prothoma Rin, Shomriddhi Rin and Shompod Rin to help materialise the dream of the entrepreneurs.
"Every year we support a lot of entrepreneurs and most of our SME loan holders already showed excellence in their business, thus helping shape up the economy. As one of the important parts of our mission statement is to ensure sustain growth in smaller enterprises, we will always support the people who have feasible business plan," Mr Haldar added.
Prime Bank has recently declared at their 21st anniversary that the bank will diversify their portfolio to some potential sectors where SME is also its top priority sector.
The bank aims to ensure 30 per cent growth of its SME lending a year. In 2015, the amount of SME loan of the bank was 17.82 billion.
Ahmed Kamal Khan Chowdhury, Managing Director of Prime Bank, said recently that the bank's new slogan "Towards a Strategic Route" also focuses extensively on promoting the SME sector. "Recently, we visited some districts of Rajshahi division and talked with some SME entrepreneurs. We've already helped some entrepreneurs of the division start and develop their business and will promote the sector, which will ultimately boost the economy", Mr Chowdhury added.
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