Abstract:
The SME sector has significant contribution in the GDP of Bangladesh.
But this sector is not getting wide attention from the policy makers and mainstream
financial institutions. Although the Microfinance industry of the country has reached
its maturity stage, it is yet to contribute remarkably for SME development. Uplifting
the Microfinance clients to SME level is a big challenge for MFIs. Various
constraints especially inadequate financing hinder the growth of SMEs. The most
important issue that needs to be addressed is bridging the gap between Microfinance
and SME financing. Up scaling the program of MFIs and downscaling the financing
process of banks and non-bank financial institutions are important to bridge the gap
and to tap the microenterprise clients, who have been identified as missing middle.
To strengthen the SME sector favorable government policy, smooth funding,
business development services and backward and forward linkage are essential. If
the SME sector could be boosted, it will contribute to the overall macroeconomic
growth of the country.
