Fintech Academy

The Future of Bangladesh’s CMSMEs

The future of Bangladesh's CMSMEs remains shrouded in uncertainty. Bangladesh’s economic landscape is intricately woven into the fabric of its countless cottage, micro, small, and medium enterprises (SMEs). These enterprises form the backbone of the nation’s economy, contributing significantly to GDP, employment, and export earnings. However, beneath the surface of this vital sector lies a silent struggle, marked by myriad challenges.

Through 11 in-depth interviews with business owners from diverse sectors — including RMG, leather, jute, light engineering, fisheries, agro and food processing, e-commerce, and handicrafts — a clearer picture emerges of the challenges faced by CMSMEs.

Based on these insights, CMSME owners express a mix of hope and apprehension. While some anticipate gradual improvements in their business growth and economy, others harbor concerns about persistent challenges such as rising input costs, supply chain disruptions, and stiff competition.

Key informant interviews with CMSME leaders revealed a shared expectation for stronger government and financial support. While existing incentives have provided some relief, they emphasized the need for increased bank financing, streamlined bureaucratic processes, and enhanced assistance to compete globally.

Market access challenges — ranging from non-tariff barriers to international competition — continue to be an obstacle for expansion, with accessible financing remaining a major hurdle for smaller businesses.

Despite inflation, rising interest rates, and escalating input costs, these resilient entrepreneurs drive growth and innovation across sectors. Looking ahead to 2025, Bangladesh’s economic landscape presents both opportunities and challenges. While optimism surrounds government support, business leaders stress the urgency of favorable policies, reduced operational barriers, and greater global competitiveness.

Political and social uncertainties may impact the business climate, underscoring the need for a stable policy framework to sustain growth.

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Instability

Do have any conspiracy behind apparel sector instability? Garments orders are moving from Bangladesh to various countries including India, Pakistan

Due to political instability, government collapse and labor unrest, concern has arisen over the fact that a part of the purchase order of Bangladesh's manufactured garments has gone to the markets of various countries including neighboring India. This situation is seen as a deep crisis for the country's largest export sector.

A company that mediates between buyers of various foreign brands and garment factories in Bangladesh said that ninety percent of the purchase orders of one of its buyers went to India due to not being able to make shipments on time. Syed Mohammad Zakir, a director of the organization named 'No Exit', told the BBC that customers can return only if the situation improves.

“Many of my orders have been placed in India. A customer who used to work here placed his orders in India due to shipment and delivery issues. If we can improve the situation, the customers will come back again.”

Ashulia, Savar and Gazipur areas of Bangladesh where large garment factories are located are the most affected areas. A worker was also killed in a clash with the joint forces during a period of labor unrest and tension