February 9, 2015—The tiniest businesses in Bangladesh will have easier access to credit under a U.K.-AID funded program implemented by Nathan Associates London and the consultancy Oxford Policy Management.
The program, Business Finance for the Poor in Bangladesh (BFP-B), “will push the boundaries of traditional lending,’’ said Sarah Cooke, the Bangladesh country resident for the Department for International Development, at a February 8 event in Dhaka announcing the program’s start. The program will work with lenders, including banks and microfinance institutions, “to ensure that viable micro and small enterprises get the financing they need to survive and grow.”
The £22.5 million (US$34 million) program has three pillars: policy advocacy, provision of a credit guarantee scheme, and a challenge fund. The fund will use a competitive process to back innovative approaches to financial product development and business support for micro and small enterprises (MSEs) in Bangladesh.
BFP-B will encourage up to £95 million (US$146 million) in additional lending to enterprises that until now have been excluded from credit, and will help create 33,000 jobs.
Dr. Atiur Rahman, governor of Bangladesh Bank, said BFP-B “will help financial inclusion expand substantially in Bangladesh.” The program “will work in coordination with the regulators to ensure that the overall micro and small enterprises lending will be conducive to our broad-based growth objective.”