By AKM Kamal Uddin Chowdhury 

DHAKA, May 6, 2026 (BSS) - Government is working to raise the contribution of Small and Medium Enterprises (SMEs) to 35 percent of the country's Gross Domestic Product (GDP) by 2030, as part of a broader strategy to ensure inclusive and sustainable economic growth.

Officials said SMEs already play a vital role in employment generation, industrial diversification, and rural economic development. The new target is aimed at further strengthening the sector's contribution to the national economy.
According to relevant sources, SMEs currently account for around 27 to 30 percent of GDP.

Policymakers believe that with targeted policy support, improved access to finance, and expanded entrepreneurship development programmes, the sector can significantly increase its economic footprint in the coming years.

As part of the roadmap, the government is implementing the National SME Policy, enhancing credit flow to small businesses through banks and financial institutions, and promoting digital transformation across SME clusters.

Special emphasis is also being placed on supporting women entrepreneurs and start-ups to ensure inclusive growth.

Institutions such as the SME Foundation and Bangladesh Bank are working in coordination with the government to facilitate easier access to financing, skill development, and market linkages for SME operators.

Talking to BSS, SME Foundation Deputy Managing Director Farzana Khan expressed optimism that achieving the 35 percent target by 2030 would not only boost GDP growth but also create new employment opportunities and strengthen economic resilience.

She said coordinated efforts between the public and private sectors would be essential to address existing challenges, including limited financing, technology gaps, and constraints in market access faced by small businesses.

She noted that the government, alongside Bangladesh Bank, has introduced various initiatives to ease access to finance for SME entrepreneurs, including refinance schemes, low-interest loans, and targeted credit facilities for cottage, micro, small, and medium enterprises.

Experts observed that rapid digital adoption is transforming the SME landscape, with e-commerce platforms, mobile financial services, and digital payment systems enabling small businesses to expand their market reach and improve operational efficiency.

The SME Foundation continues to support entrepreneurs through training, capacity-building programmes, and market linkage initiatives to help them adapt to technological changes and remain competitive.

Farzana Khan said the foundation plays a significant role in strengthening the SME sector through policy support, capacity development, and financial facilitation.

Established as a national focal organisation, it works closely with government agencies, financial institutions, and private sector stakeholders to enhance the competitiveness and sustainability of small businesses.

Over the years, the foundation has implemented initiatives such as entrepreneurship training, product diversification programmes, cluster-based industrial development, and market linkage support to improve productivity and expand access to domestic and international markets, she added.

She also said the foundation has facilitated access to finance by collaborating with banks and financial institutions to simplify loan procedures, particularly for entrepreneurs in manufacturing, agro-processing, and service sectors.

Special emphasis has been given to women's entrepreneurship development through targeted training, mentorship, and support services aimed at increasing women's participation in business activities.

Industry stakeholders said cluster development programmes have strengthened traditional industries such as light engineering, handicrafts, jute goods, and agro-based products, contributing to employment generation at the grassroots level.

Despite notable progress, SME owners continue to face challenges, including limited access to long-term financing, high interest rates, inadequate infrastructure, and a shortage of skilled manpower.

Entrepreneurs have called for simplified regulatory procedures and improved logistics support to enhance competitiveness in both domestic and international markets.

In Rangpur, a small agro-processing enterprise that started with modest investment has grown into a profitable venture employing over 20 local workers.

Supported by SME financing schemes, the business now supplies packaged agricultural products to multiple districts, demonstrating the sector's potential to reduce rural poverty.

Chairman of the Department of Organization Strategy and Leadership of Dhaka University, Md Rashedur Rahman, emphasised that strengthening SME clusters, improving access to technology, and enhancing export readiness would be critical for sustaining growth.

He also stressed the importance of coordinated efforts between public and private stakeholders to create a more enabling business environment.

Rashedur Rahman, also Executive Director of the Innovation, Creativity and Entrepreneurship Center under Dhaka University, said that with continued policy support and innovation-driven expansion, SMEs are expected to remain a cornerstone of Bangladesh's journey toward becoming a developed economy.

Deputy Managing Director of Dutch-Bangla Bank Limited, Mohammed Shahid Ullah, described the SME sector as the most vital driver of inclusive economic growth in Bangladesh, emphasising its role in employment generation and grassroots industrialisation.

He noted that SMEs represent a diversified client base across cottage, micro, small, and medium enterprises, which the bank actively serves through tailored loan products, including working capital, term loans, and financing for women entrepreneurs.

According to him, SME financing is not just a business segment but a strategic priority aligned with national development goals, particularly in promoting entrepreneurship outside major urban centres.

The bank's participation in refinance schemes and low-interest programmes reflects this commitment, he added.

However, he also highlighted persistent challenges in SME financing, including lack of proper financial documentation by small entrepreneurs, heavy dependence on collateral-based lending, and higher operational and monitoring costs for small-ticket loans.

He said that despite these challenges, SMEs remain bankable with proper support, and repayment behaviour in many cases is satisfactory.

From a strategic standpoint, he underlined the importance of expanding technology-driven banking services to reach SMEs more efficiently, encouraging women entrepreneurship through dedicated products, and strengthening financial literacy and credit discipline among entrepreneurs.

He added that with improved economic stability, policy support from Bangladesh Bank, and digital innovation, the SME sector will continue to be a key growth pillar for both banks and the national economy.