The microenterprise sector has the potential to emerge as one of the main forces driving inclusive growth in Bangladesh. Currently, more than half of the country’s total employment is in the microenterprise sector, but this sector’s contribution to the gross national income is only about 25%. To improve this situation, the flow of funds – among other things – to the microenterprise sector must be increased, Bangladesh Bank Governor Dr Ahsan H Mansur has commented.

Speaking as the chief guest at the inauguration ceremony of the country’s first-ever ‘Credit Enhancement Scheme (CES)’ – launched by PKSF – today, he said that the amount of loans disbursed by PKSF is now only about BDT 15,000 crore, which can be increased tenfold. Stressing on the need for ‘cashless society’ to smoothen financial activities, ensure better security of people’s money and reduce irregularities in the financial sector, he said PKSF and its Partner Organizations can play a leading role to this end. He called for greater inclusion of the climate-vulnerable population in remote areas of Bangladesh in the institutionalized financial programs.

PKSF Chairman Zakir Ahmed Khan presided over the program organized at PKSF Bhaban in Agargaon. Nazma Mobarek, Secretary of the Financial Institutions Division (FID), and Hoe Yun Jeong, Country Director of the Asian Development Bank’s Bangladesh Mission, were present as the Special Guests. PKSF Managing Director Md Fazlul Kader delivered the welcome speech. Two presentations were made by Deputy Managing Director Md Mashiar Rahman and Assistant General Manager Md Rawshan Habib.

Zakir Ahmed Khan said, “The CES is being launched to formally involve commercial banks in the efforts of PKSF to transform low-income people of the country into entrepreneurs. Under this scheme, PKSF’s Partner Organizations (POs) will take loans from banks and disburse them to eligible entrepreneurs at the grassroots. PKSF will provide guarantee for the entire risk of this loan at the bank level.” He also noted that PKSF was working to create a database of micro-entrepreneurs across the country, which will contribute to making the flow of money to these enterprises more dynamic and effective.     

FID Secretary Nazma Mobarek praised the contribution of PKSF and its POs in the microenterprise sector of Bangladesh, saying that PKSF’s loan recovery rate is 99.9 percent and their loans are not rescheduled. She called on the country’s commercial banks to increase investment in the microenterprise sector.

Regarding the Asian Development Bank’s partnership with PKSF, ADB Country Director Hoe Yun Jeong said that since 1997, the development partner has financed $370 million in seven PKSF projects. Of this, $200 million was financed for PKSF’s MFCE project in 2023. The CES was launched as a component of this project. “We are optimistic that the Credit Enhancement Scheme will be successful and it will pave the way for further financial innovation in the microfinance sector in Bangladesh.”

PKSF Managing Director Md Fazlul Kader said that while the microenterprise sector has immense potential for inclusive growth in the country, the sector lacks the necessary finance and modern technologies. Currently, there are about 9 million microentrepreneurs in Bangladesh, of which 4 million are already organized under PKSF. He emphasized on the need for development of the microenterprise sector through increased financing, use of appropriate technologies, necessary training and time-befitting marketing arrangements.

PKSF signed agreements with five commercial banks and one investment company at the event. BRAC Bank Managing Director and CEO Selim RF Hussain, City Bank Managing Director and CEO Mashrur Arefin, Mutual Trust Bank Managing Director and CEO Syed Mahbubur Rahman, Prime Bank Additional Managing Director Faisal Rahman, Southeast Bank Managing Director Abidur Rahman Chowdhury (Current Charge) and the UAE-Bangladesh Investment Company (UBICO) Limited Managing Director (Current Charge) M M Mostafa Bilal signed the agreements on behalf of their respective entities.