Sme Banking in Bangladesh

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SME Banking in Bangladesh.
According to the European Union (2003) SMEs are defined as enterprises which have at most 250 employees and an annual turnover not exceeding 50 million Euros.

According to the World Bank (2006) medium enterprises are defined as enterprises which have at most 300 employees and an annual turnover not exceeding 15 million US dollars.

In the context of Bangladesh, the development of Small and Medium Enterprises (SMEs) can be considered as a vital instrument for poverty alleviation and ensure the rapid industrialization.


Electronics and electrical
Light engineering and metal-working
Agro-processing/agro-business/plantation agriculture/ specialist farming/tissue-culture Leather-making and leather goods
Knitwear and ready-made garments
Plastics and other synthetics
Healthcare & diagnostics
Educational services
Fashion-rich personal effects, wear and consumption goods.


Resource scarcity
High employee turnover
Absence of modern technology
Poor physical infrastructure
Financial constraints
Lack of uniform definition
Lack of entrepreneurship skills
Participation of women entrepreneurs
Access to Market and lack of awareness regarding the importance of marketing tool Lack of commitment to innovation and customer satisfaction
Lack of quality assurance
Lack of research and development facilities
Fierce competition with the cheaper foreign goods


Government must have to take adequate measures to ensure the uninterrupted supply of raw materials for SME.

Government needs to take appropriate measures to fix the minimum salary/wages of the employees of SME. That will help to minimize the employee turnover.

Government and financial institution may provide adequate finance for modernization and technological advancement.

Development of infrastructure is essential for the optimum growth of SME. So government of Bangladesh needs to take appropriate policy strategy for the infrastructure development of Bangladesh.

Government, financial institutions and Non Government Organizations (NGOs) may take necessary steps to ensure uninterrupted financial support to the prospective SMEs in Bangladesh.

Due to the absence of uniform definition the policy formulation and implementations are not possible. Government should take initiative to develop a uniform definition of each category of SMEs.

Govt. of Bangladesh should take the initiative to develop web pages exclusively for SME and an integrated SME database. It will reduce the barriers to SME access to global market.

In order to ensure the retention of skilled workforce the government should make the entrepreneurial career attractive by minimizing the uncertainty.

In order to encourage women entrepreneurship govt. may; involve women entrepreneurs in policy formulation and implementation. arrange funds for women entrepreneurs.

provide necessary training to women entrepreneurs in rural and urban area of Bangladesh.

SME foundation may take appropriate marketing tools to popularize their products.

For minimizing red tapes and accelerating the growth of SME government may provide one roof service under the SME foundation


Small and medium enterprises (SMEs) act as a vital player for the economic growth, poverty alleviation and rapid industrialization of the developing countries like Bangladesh. SMEs are significant in underlying country’s economic growth, employment generation and accelerated industrialization. -----------------------------------------------------------------


*According to Industrial Policy 2005:

Small enterprise
• Manufacturing sector: industries having fixed assets below Tk.15 million. • Non-manufacturing sector: enterprises which employ...
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