Tailored financial products to empower MSMEs

M. Khurshed Alam
Additional Managing Director, NCC Bank

The Daily Star (TDS): How do you assess the current state of the MSME sector in Bangladesh, and what role do you think banks can play in accelerating its growth?

M. Khurshed Alam (MKA): The MSME sector serves as a cornerstone of Bangladesh's economic growth, contributing over 25% to GDP and employing around 30% of the workforce. Despite its potential, the sector remains underutilised due to informality, limited access to finance, and structural constraints. Banks can play a transformative role by offering tailored financial solutions, simplifying lending procedures, promoting digital and agent banking, and supporting capacity building. Through inclusive and development-focused banking strategies, the financial sector can significantly accelerate MSME growth and enhance overall economic resilience.

TDS: What are the major challenges MSMEs face in accessing finance, and how is your bank addressing these issues—especially for micro and cottage industries?

MKA: MSME financing in Bangladesh is constrained by several structural and operational challenges, including limited access to formal credit channels, inadequate bookkeeping practices, absence of comprehensive business plans, insufficient collateral, and a lack of market intelligence regarding demand, supply chains, and competitive positioning. These issues are particularly pronounced in the micro and cottage industry segments, which often operate informally and lack financial literacy.

To address these gaps, our bank has developed a range of MSME-friendly credit and deposit products tailored to the unique needs of this sector. We are actively collaborating with key stakeholders such as the SME Foundation, Microfinance Institutions (MFIs), and the Skills for Employment Investment Programme (SEIP) under Bangladesh Bank to enhance financial inclusion. Strategic initiatives include streamlined credit approval processes, reduced Turnaround Time (TAT), simplified documentation, and expanded access to government-backed refinance and pre-finance schemes. We also support the sector through awareness campaigns, participation in trade fairs, facilitation of open credit disbursements, and the implementation of the Credit Guarantee Scheme (CGS) to mitigate credit risk and improve loan accessibility for underserved enterprises.

TDS: Does your bank have any dedicated products, financial literacy programmes, or credit guarantee schemes targeted at MSMEs? Please share key initiatives.

MKA: NCC Bank PLC has a strong commitment to supporting the MSME sector through dedicated products, capacity-building programmes, and inclusive financing strategies. Nearly one-fourth of our total loan portfolio is allocated to the CMSME segment, reflecting our strategic focus.

We offer a diverse range of tailored loan and deposit products, including SME Business Debit Cards and app-based transaction platforms to enhance financial convenience. The bank actively organises region-specific financial literacy programmes, entrepreneurship training, and customer awareness initiatives to strengthen the operational capacity of MSMEs.

Under various Bangladesh Bank schemes, we provide concessional financing, such as the Tk. 25,000 crore Pre-finance Scheme, Refinance for Women Entrepreneurs, and Agro-processing Industries, alongside participation in the Credit Guarantee Scheme (CGS). We also prioritise financial inclusion through start-up financing, cluster and group-based lending, and outreach to the unbanked population.

TDS: How has your bank leveraged technology or digital banking solutions to improve outreach and services to MSMEs, particularly in semi-urban and rural areas?

MKA: With over 32 years of successful operations, NCC Bank PLC has built a legacy of trust and innovation, consistently evolving to meet the changing needs of its clientele. Over the past three decades, we have strategically embraced digital transformation to expand outreach and enhance service delivery, particularly to MSMEs in semi-urban and rural areas.

Our flagship mobile application—NCC Always—provides 24/7 access to a full suite of banking services, enabling MSMEs to conduct seamless and secure transactions anytime, anywhere. To support business-specific financial needs, we offer SME Business Debit Cards issued in the name of business entities, promoting greater financial transparency and ease of operation. Furthermore, we have introduced QR code-based payment solutions to facilitate digital commerce for MSMEs and deployed an AI-powered live chatbot on our website to provide real-time assistance and support. These initiatives underscore our commitment to harnessing technology as a catalyst for inclusive growth and financial empowerment in the MSME sector.

TDS: What steps is your institution taking to support women-led MSMEs and improve financial inclusion among underrepresented segments?

MKA: To empower women-led MSMEs and enhance financial inclusion, NCC Bank PLC has established a dedicated Women Banking Division and Women Entrepreneur Dedicated Desks (WEDD) across branches. We offer tailored loan and deposit products, along with preferential financing under government-backed refinance and pre-finance schemes at competitive interest rates. Additionally, we conduct targeted financial literacy initiatives, such as SME fairs and open credit programmes, to build capacity and foster entrepreneurial growth among underrepresented segments.

TDS: Looking ahead, what policy reforms or collaborative efforts between banks and the government would you recommend to ensure sustainable development of Bangladesh's MSME ecosystem?

MKA: To foster sustainable MSME development, enhanced policy reforms and stronger public-private collaboration are essential. Beyond current initiatives by Bangladesh Bank, key recommendations include targeted tax incentives for new entrepreneurs, expanded concessional financing, and affordable insurance schemes tailored to MSMEs. Scaling up Credit Guarantee Schemes will further de-risk lending. Additionally, market-aligned training programmes and strategic infrastructure development—including digital and logistical support—are critical to creating an enabling environment for inclusive and resilient MSME growth.