Cottage, micro, small and medium enterprises (CMSME) are set to become a core priority in the FY27 budget, with the government weighing fiscal incentives, tax reforms and a joint fund to revive jobs and demand.
The focus reflects the government’s push for economic democratisation, with employment generation anchored in the CMSME sector.
Prime Minister’s Adviser on Finance and Planning Rashed Al Mahmud Titumir said the proposed measures may include incentives, tax restructuring and the formation of a joint fund to accelerate sector growth.
“The steps could link with incentives, tax structure and formation of joint fund. As we’re committed, we want to see the sector flourishing significantly in the coming days,” he said.
He spoke as chief guest at a discussion organised by Dhaka Chamber of Commerce and Industry (DCCI) titled Synergising the Banking Sector Lenders’ and Borrowers’ Perspective, held in Dhaka on Wednesday.
Framing broader reforms, he said changes to the Bank Company Act and other financial laws are unavoidable to build a coordinated economic structure.
He stressed the need to strengthen the bond and capital markets to reduce reliance on banks and create a sustainable credit system.
He said the government plans to support labour-intensive industries, reopen closed state-run factories and expand support for women entrepreneurs to stimulate production and employment.
He acknowledged stress in the financial sector and said policy and structural reforms are being prepared to stabilise the system and support recovery.
Bangladesh Association of Banks Chairman Abdul Hai Sarkar said simplifying SME financing is critical, noting private banks are stepping up but coordination gaps remain.
DCCI President Taskeen Ahmed warned deteriorating asset quality and rising non-performing loans are eroding banks’ lending capacity and increasing credit risks.
From Bangladesh Bank, Executive Director Naushad Mostafa said lack of reliable data remains a key weakness, calling for AI-based integration across institutions to improve decision-making.
Bangladesh Bank Director Selim Al Mamun said structural weaknesses cannot be fixed overnight, adding that despite excess liquidity, private sector activity remains subdued due to macroeconomic instability.
He said improving the ease of doing business is essential to restore investor confidence.
Another Bangladesh Bank Director Md Abdul Wahab stressed the need for alternative financing and urged faster development of bond and capital markets to reduce dependence on banks.
NCC Bank Managing Director and CEO M Shamsul Arefin said lenders are prioritising green financing, but weak documentation among CMSME entrepreneurs limits access to credit.
City Bank Additional Managing Director Ashanur Rahman said the rollout of International Financial Reporting Standard 9 will tighten provisioning flexibility, making it more important to strengthen credit guarantee schemes and simplify loan processes.
He also stressed the need for a dedicated marketplace for CMSMEs, warning that without market access, loan recovery and sustainable lending will remain a challenge.
