Today, June 27th, we celebrate International MSME Day, honoring the significant contributions of Micro, Small, and Medium Enterprises (MSMEs) to the global economy. Across the world, events are highlighting how MSMEs drive economic development, create jobs, and support sustainable growth.
THE IMPORTANCE OF MSMES: MSMEs are the backbone of the global economy, making up 90 per cent of businesses, providing 70 per cent of employment, and contributing between 40 per cent and 60 per cent of GDP worldwide. These enterprises play a crucial role in promoting economic growth, reducing income inequality, and alleviating poverty, particularly in many Asian countries. MSMEs are vital for regional and rural development, significantly boosting GDP and employment in nations like India and China. Despite their critical role, MSMEs face challenges such as limited access to finance, with a staggering $5.2 trillion annual finance gap in developing countries. However, MSMEs are increasingly adopting sustainable practices and digital technologies, which enhance their resilience and long-term viability.
CMSMES IN BANGLADESH: In Bangladesh, Cottage, Micro, Small, and Medium Enterprises (CMSMEs) are essential for economic development. They significantly contribute to national income, create jobs, and help achieve Sustainable Development Goals (SDGs) like eradicating poverty, promoting gender equality, and empowering women. The government recognises CMSMEs as a key driver of industrialisation.
With approximately 7.9 million SMEs in Bangladesh, CMSMEs contribute about 25 per cent to the national economy and generate 40 per cent of overall employment. They account for nearly 80 per cent of total industrial employment and about 90 per cent of industrial units in the country, adding 45 per cent value to the manufacturing sector. Despite their vital role, CMSMEs face a financing gap of US$ 2.8 billion, with only 10 per cent accessing bank finance.
NATIONAL BANK LIMITED'S COMMITMENT TO CMSMES: National Bank Limited is committed to supporting CMSMEs, aiming to allocate 25 per cent of its total loans to these enterprises by 2024. Currently, 12 per cent of the bank's loan portfolio, amounting to Tk 47.37 billion, is dedicated to CMSMEs where total number of customers around 10,000. To better serve CMSMEs, the bank is increasing loan limits, tailoring offerings to meet customer needs, digitising monitoring processes, and ensuring continuous customer communication. Each branch has a dedicated desk for women entrepreneurs, offering tailored loan products like the "NBL NariJagaran Loan." For underprivileged groups, the bank provides finance through refinance schemes, the Credit Guarantee Scheme (CGS) from Bangladesh Bank, and specific products like the "NBL Trinomul Uddog Loan."
National Bank Limited also offers various SME products, including the "NBL Small Business Loan," and collaborates with Bangladesh Bank, SME Foundation, and trade bodies to train entrepreneurs, conduct awareness campaigns, and engage in marketing activities. By expanding its reach and support for CMSMEs, the bank acknowledges their potential to significantly boost the national economy.
CONCLUSION: On this International MSME Day, it is essential to recognise and celebrate the vital role of MSMEs in global economic development. Institutions like National Bank Limited are at the forefront of supporting CMSMEs, creating an environment where these enterprises can thrive and contribute to sustainable and inclusive economic growth.
Md. Touhidul Alam Khan is Managing Director & CEO of National Bank Limited