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The volume of lending to the country's Cottage, Micro, Small, and Medium Enterprise (CMSME) saw a substantial fall during the January-March quarter of FY25 (Q3).
Disbursement of loan among CMSMEs declined by 9.97 per cent (year-on-year) during January-March period of fiscal year (FY) 2024-25 over corresponding quarter of the previous fiscal, according to Bangladesh Bank (BB) data.
However, the amount of CMSMEs’ loans also decreased by 23.60 per cent in the January-March quarter of FY '25 compared to that of the previous quarter (October-December of FY25).
According to the data, disbursements of CMSME loans dropped to Tk 478.13 billion in January-March 2025, compared to Tk 531.07 billion in the corresponding period of the previous fiscal year.
On the other hand, the amount of outstanding CMSME loans at the end of March of FY25 was 0.59 per cent lower than that of the same month of the previous fiscal year, BB data showed.
Outstanding amount of CMSME loans was 16.84 per cent of the total loans at the end of March of FY25.
The amount of outstanding CMSME loans also stood at about Tk 3.02 trillion in January to March period of 2025 as against Tk 3.04 trillion in the same period of 2024, BB data showed.
The amount of CMSME financing by private-sector banks accounted for 73.70 per cent of the total lending as of March of FY25.
On the other hand, foreign banks' share to the total lending was 1.50 per cent, followed by specialised banks with 2.47 per cent, non-bank financial institutions (NBFIs 4.17 per cent, state-owned banks 18.15 per cent.
Banks and finance companies have to achieve at least 27 per cent of total loan disbursement target by 2029, a BB circular issued in March 2025.
According to the circular, people involved in f-commerce and e-commerce will be entitled to get loans up to Tk 0.5 million under the CMSME scheme.
Furthermore, the definition of woman entrepreneurs has been updated in the new policy, officials said, adding that a company is now considered as woman-led if any woman holds at least 20 per cent ownership with having 51 per cent female employees. Earlier, the threshold for women's ownership was 51 per cent.
When asked, Chairman of Policy Exchange of Bangladesh (PEB) Dr Masrur Reaz, said the decline in the disbursement of CMSME loans during January-March FY25 highlights the urgent need for targeted financial support, especially for small entrepreneurs.
He also emphasised that private banks' dominant role in CMSME financing must be complemented by active participation from state-owned and specialised banks to help ensure broader access, particularly in remote rural and peri-urban areas.
According to the Planning Division, CMSMEs make up 90 per cent of industrial units and 80 per cent of industrial employment.
However, Dr. Reaz hailed the revised policy, recognising women entrepreneurs with 20 per cent ownership and majority female workforce, terming it 'a progressive step'.
He also stressed that strengthening the CMSME sector is critical for employment generation, economic resilience, and empowering youth, particularly amid the government's goal to create sustainable jobs for educated young people.
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