Source:BSS
DST News: The government has launched a range of initiatives aimed at turning the Small and Medium Enterprise (SME) sector into a key engine of national economic growth.
In recent months, the Investment Coordination Committee has convened four consecutive meetings to push forward policy reforms and address long-standing obstacles to SME development.
These meetings were attended by Lutfey Siddiqi, Chief Adviser’s Special Envoy for International Affairs and Chair of the Committee; Dr Ahsan H. Mansur, Governor of Bangladesh Bank; Md Abdur Rahman Khan, Chairman of the National Board of Revenue (NBR); along with representatives from various public and private institutions.
Participants underscored the importance of engaging entrepreneurs directly in policymaking to ensure that SMEs are effectively integrated into the mainstream economy.
Among the reform measures already introduced are the withdrawal of the rule requiring 10 percent of foreign order proceeds to be deposited in banks and an SME Foundation proposal to allocate each business an annual foreign currency quota of USD 3,000, which is currently under consideration by Bangladesh Bank.
During the Committee’s meeting on October 9, 2025, held at Bangladesh Bank, several key decisions were adopted. These included plans for a joint workshop between the SME Foundation and Bangladesh Bank’s SME & Special Programs Department (SMESPD) to design SME-friendly financial products and a review of the existing SME Master Circular to assess its effectiveness. The meeting also approved a feasibility study on issuing loans up to Tk 500,000 without trade licenses and the exploration of interest rate adjustments at the client level to make refinancing schemes more appealing.
Earlier, the Committee met on August 28, 2025, at the Chief Adviser’s Office to identify major challenges facing SMEs, including payment delays, customs hurdles, licensing barriers, and limited financing options. A follow-up meeting on September 21 at the SME Foundation gathered direct input from entrepreneurs, producing a set of recommendations for relevant ministries. Another virtual meeting on October 8 connected SME operators nationwide to collect additional feedback.
Ongoing efforts include enhanced NBR monitoring to simplify sample clearance and Bangladesh Bank initiatives to allow digital wallet-based payments similar to those in the ICT sector. The central bank has also instructed SSL Commerce and other banks to ensure timely deposits of online sales proceeds and to incorporate B2B and B2C export models into policies for online marketplace exports.
Additional reforms under consideration include awareness campaigns on SME policies, the introduction of a special foreign currency card for entrepreneurs, and plans by the Bangladesh Foreign Trade Institute (BFTI) to publish SME sector reports targeting international buyers. Coordination between the Chief Adviser’s Office and SME Foundation is also underway to develop a Standard Operating Procedure (SOP) to enhance export promotion through Bangladeshi embassies abroad.
Recent regulatory adjustments include raising the advance payment limit without bank guarantees from USD 10,000 to USD 20,000, doubling the ERQ account ceiling from USD 25,000 to USD 50,000, and permitting export transactions on open account terms with insurance coverage from local providers. The NBR has also simplified the HS Code process, ensuring tariff assessments can be completed if the first four digits of the eight-digit HS code match.
Commenting on these reforms, Lutfey Siddiqi stated, “Our goal is to inject greater dynamism into the economy. SMEs contribute immensely to economic activity, though their voices are often overshadowed by large businesses. We must empower SME entrepreneurs by simplifying every stage of their operations — from financing to payments and logistics. The government’s role should be that of a facilitator, not an obstacle.”
An emergency meeting of the Investment Coordination Committee was also held on October 9, 2025, at the Bangladesh Bank Conference Room, chaired by Dr Ahsan H. Mansur, with Lutfey Siddiqi and Md Abdur Rahman Khan participating as special guests.
