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IBBL: A Partner in SME Development of Bangladesh

Small and Medium Enterprises (SMEs) have been gaining popularity across the world due to its significant role in the development context given their greater resource-use efficiency, capacity for employment generation, technological innovation, promoting inter-sectoral linkages, raising exports and developing entrepreneurial skills.
Contributions of the SMEs in some selected countries show that it has provided very significant portion of GDP and employments in their national economies.

Asian Business Review reveals that contribution of SMEs in Bangladesh is 80% in enterprises, 25% in GDP & 40% in employment. In India, it is 97.6% in enterprises, 80% in GDP. In China contribution of SMEs is 99% in enterprises, 60% in GDP and 92% in employment while in Japan 99.7% in enterprises, 69.5% in GDP and 72% in employment.

The SME plays a pivotal role in the economic growth and development of Bangladesh as a mega source for job creation, income generation, and development of forward and backward industrial linkages and fulfillment of local social needs.

SME sector helps alleviate poverty, increase income level of rural people and promote agro-industrial linkage in Bangladesh. SMEs contribute towards better utilization of local resources and skills that might otherwise remain unutilized. It is a strong medium for diversification of rural economy and for peaceful and concurrent socio-economic development of all classes of people.

Realizing the facts, the government of Bangladesh has taken a number of measures for developing the SME sector. Bangladesh Bank has also taken various pragmatic steps for development of this sector like introducing separate SME Department, setting SME investment disbursement targets for all the scheduled banks, introducing refinance scheme, setting disbursement targets for women entrepreneurs, introducing women entrepreneur dedicated desks in all the bank branches, SME cluster development etc.

In accordance with the objective of Sharia’h and its organizational objective of equitable distribution of wealth and socio economic development of the low income community of the country, IBBL has given due importance and priority to the small and medium enterprises since its inception.

Welcoming the government policy and regulatory desires, IBBL has been working for SME development in systematic effort. Due to the patronization of the government and the central bank of the country, SME investment is now 24% of total investment of the country amongst all the banks and financial institutions, private banks are holding the 2nd position in making SME investment which is 27% to their total investment portfolio.

Presently 0.13 million Small and Medium Entrepreneurs of the country is banking with IBBL a 77:23 ratio of male and female entrepreneurs. IBBL disbursed Tk. 249.81 billion during the year 2014 which is 27% of the national disbursement to the SME sector. IBBL takes various initiatives for the development of this sector which include entrepreneurship development training, capacity building, conducting baseline survey, reaching the doors of the entrepreneurs through its wide network of 294 branches, developing patronizing various seminars, symposia, road show, SME fair, cluster development etc.

IBBL being a welfare oriented bank gives utmost priority to the desires of the mass people while designing its products and programmes and hence IBBL has a wide range of SME products including women entrepreneurs’ investment scheme having flexible in terms and, collateral requirements. In recognition of its in developing SMEs of the country, IBBL achieved ‘Small Entrepreneur Friendly Bank of the Year’ award from SME Foundation & Bangladesh Bank over the performance of the year 2013.

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