The Cottage, Micro, Small and Medium Enterprises (CMSME) sector comprises an estimated 10.70 million ventures scattered all over Bangladesh. It is the true backbone and, at the same time, the unsung growth engine of the economy. It is a significant generator of employment, and fosters women’s empowerment, social development, and nationwide economic resilience.

PKSF’s strategic expansion of ME portfolio

Considering its potential in sustainable poverty alleviation and rural wage employment creation, PKSF started Microenterprise (ME) program in 2001. It evolved over the years and PKSF continuously redesigns and introduces new financial services to match the evolving needs. The share of ME loans within the total loan portfolio is rapidly increasing.

Key challenges

A World Bank study in 2017 reported a USD 39 billion financing gap in the MSME sector, which is the key hindrance for its further expansion. However, low-technology trap, critical skill gaps, limited market reach, and insufficient value addition to primary products and services are the other most critical challenges facing the sector.

PKSF’s initiatives

PKSF has launched a Credit Enhancement Scheme (CES), a gurantee arrangement that enables its POs to access commercial bank financing, thereby expanding the loanable fund base for microenterprises. Furthermore, it is working to develop a crowdfunding platform to mobilize additional sector resources.

Microenterprises in Bangladesh reel from outdated tools, low productivity, poor quality, leading to limited profitability. PKSF and its POs promote modern technologies, modular devices, and common service center to turn the enterprises into decent employment hubs. Digital tools, smart analytics, psychometric credit profiling, AI-based automation, digital payments, and blockchain for supply chain traceability are also being piloted.

At the same time, PKSF is supporting product standardization, certifications (BSTI, GAP, HALAL, HACCP), branding, fairs, e-markets, and exports.

PKSF strongly emphasizes on environmental sustainability in enterprise promotion. It promotes the adoption of Resource-Efficient and Cleaner Production (RECP), recycling, and renewable energy. PKSF has supported establishment of 274 Environment Clubs across Bangladesh, and Environment and Climate Change Units at 44 POs.