To sustain the country's economic growth, reduce poverty, and ensure sustainable development through increased employment in the CMSME sector, the following targets for loan/investment disbursement to the CMSME sector by banks and financial institutions have been set through to the year 2029:
Disbursement Targets:
By 2029, the following sectoral distribution targets must be achieved annually :
| Category | Target (as % of total CMSME loans/advances) |
|---|---|
| Total CMSME loan & advance ratio | 27% by 2029 |
| Informal/Marginal, Cottage, Micro, and Small Enterprises loan & advance ratio | 50% annually |
| Women-led enterprises loan & advance ratio | 15% annually |
| Cluster-based financing | Minimum 10% annually |
Sector-wise CMSME loan allocation targets (Annual)
| Sector | Minimum Target |
|---|---|
| Manufacturing Industries | At least 40% |
| Service Sector | At least 20% |
| Trade/Business Sector | Maximum 40% |
For Successfully achieve the target or fulfill the goal Bangladesh Bank offer some refinancing scheme. Bangladesh Bank, through its guidelines and regulations, periodically introduces refinance schemes and special funds that offer subsidized interest rates and flexible repayment terms to promote sustainable industrial development and foster economic growth in Bangladesh. These initiatives are designed to benefit entrepreneurs across various sectors by improving access to finance and reducing borrowing costs.
REFINANCING:
Refinancing refers to the process of obtaining low-cost loans through either a refinance or pre-finance system. Under this process, clients can access affordable financing provided by the Bangladesh Bank, SME Foundation, or other institutions via authorized financial intermediaries. Both refinance and prefinance systems serve a similar purpose: to support project-based financing with favorable terms. These schemes are primarily designed to stimulate the growth of the CMSME sector (Cottage, Micro, Small, and Medium Enterprises) and promote sustainable financing. Bangladesh Bank and the SME Foundation offer a range of refinance and prefinance schemes tailored for different project types. Through these schemes, eligible clients may access loan amounts based on project-specific ceilings, helping them fund their initiatives efficiently.
Difference Between Refinance and Pre-Finance:
Upon proper verification of the submitted documents and eligibility, Bangladesh Bank or the SME Foundation approves the refinancing fund. This entire process constitutes what is referred to as refinancing.
Once the submitted documents and project proposal pass the inspection and meet all evaluation criteria, Bangladesh Bank or the SME Foundation sanctions the loan amount directly to the FI’s account. The FI is then responsible for disbursing the funds to the client within the specified timeframe.
This structured process is known as prefinancing.
Bangladesh Bank launched the Women Entrepreneur Refinance Scheme to promote financial inclusion and empower women in business. With a dedicated fund of BDT 4,500 crore, the scheme offers loans at a reduced interest rate of 5%, enabling access to affordable capital. It supports cottage, micro, and small enterprises led by women, many of whom lack collateral or formal banking history. The initiative helps boost employment, reduce poverty, and foster gender equity in the SME sector. Bangladesh Bank introduced this fund to bridge the financing gap and stimulate sustainable economic growth through women-led enterprises.
Definition of Women Entrepreneur:
An enterprise within the CMSME sector shall be considered a women-led enterprise if it meets any of the following conditions:
Incentive Rate and Beneficiaries:
From 1 July 2021, if any CMSME women entrepreneurs have received refinance under this scheme and if they have properly utilized the loan and made timely/full repayment within the stipulated period, then:
Loan Terms and Conditions:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The government of people’s republic of Bangladesh has constituted New Entrepreneur Development Project to develop New Entrepreneurs in Cottage, Micro and Small Enterprise Sector with finance from Bangladesh Bank to provide short-, medium- and long-term loans to new borrower who have no previous loan record through the accredited Participating Financial Institutions (PFIs).
Definition of New Entrepreneur:
Loan Terms and Conditions:
Note: Single borrower may not avail more than one facility for different projects.
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
To create employment in rural areas and reduce poverty, the ongoing refinance fund encourages financing by banks and financial institutions for establishing agro-processing industries and related supportive service sectors in the agricultural field.
Agro-Based Industry List:
Loan Terms and Conditions:
Interest Rate: Maximum 7.00%
Note:
Eligible Investments to avail Loan:
Required Documents:
Any other relevant documents that might be required from time to time
To realize the importance of the cottage, micro, small, and medium business sector, Bangladesh Bank has introduced a Cluster Refinance Scheme. Most businesses under clusters are engaged in manufacturing and are capable of producing unique items that often need to be imported from abroad. By supporting these clusters, the scheme reduces dependency on foreign imports and enables businesses to earn significant foreign currency through exports.
This fund is financed entirely from Bangladesh Bank’s own resources.
Required Documents:
Any other relevant documents that might be required from time to time
The Financial Sector Fund for the Development of Micro, Small and Medium Enterprises (FSFDMSME) is a refinancing program introduced by Bangladesh Bank to strengthen CMSMEs. It provides low-cost credit through banks and financial institutions, helping small businesses access affordable financing.
Loan Terms and Conditions:
Eligibility of the End-Borrowers:
Note:
Non eligible Sector:
purchase of land, land use rights, payment of tax and import duties, working capital and cost of such activities as resettlement and other compensation cost and refinancing for existing loans.
Non-eligible for financing under the TSL scheme-Crop and fish production, Real estate, Finance, insurance, precious metal dealing, Bar and pub, Amusement, entertainment (except for amusement park, tourism, filmmaking and TV broadcasting), Weapon, ammunition, Anything harmful to the social stability.
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The SMEDP Revolving Scheme is a refinance initiative under the Second Small and Medium-Sized Enterprise Development Project (SMEDP-2), jointly funded by the Asian Development Bank (ADB) and the Government of Bangladesh. Managed by Bangladesh Bank, the scheme aims to expand access to finance for CMSMEs—especially those located outside Dhaka and Chattogram metropolitan areas..
Loan Terms and Conditions:
Interest Rate: Maximum 8.00%
Note:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The CMSME refinance scheme is a major initiative by Bangladesh Bank to enhance long-term financing access for Cottage, Micro, Small, and Medium Enterprises. This revolving fund supports term loans with tenures exceeding one year, disbursed through banks and financial institutions across the country. At least 75% of the loans must go to cottage, micro, and small enterprises, with 70% directed toward manufacturing and services sectors. The scheme prioritizes high-impact industries like agriculture, ICT, leather, light engineering, and women-led businesses, aiming to strengthen the backbone of Bangladesh’s economy.
Loan Terms and Conditions:
Interest Rate: Maximum 7.00%
Note:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
other relevant documents that might be required from time to time
The Government of the People’s Republic of Bangladesh has constituted a Loan fund considering the adverse economic impact of COVID-19 on the returning migrant workers, unemployed youth and rural entrepreneurs with a special focus on women entrepreneurs under the Supporting Post COVID-19 Small Scale Employment Creation Project (SPCSSECP) funded by Asian Development Bank (ADB). Cottage, Micro and Small Enterprises (CMSEs) will be financed under the project and such enterprises must be started or operated by targeted vulnerable groups such as returning migrant workers, unemployed youth and rural entrepreneurs.
Loan Terms and Conditions:
Note:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The SME Foundation’s 6% refinance fund is a Tk 450 crore revolving loan scheme designed to empower small and medium enterprises in Bangladesh. Entrepreneurs in priority sectors, export/import-substitute industries, underprivileged groups, and ICT are eligible. Loans range from Tk 1 lakh to Tk 25 lakh (up to Tk 50 lakh for equipment), with a 6% interest rate and 4-year repayment period. Women entrepreneurs receive 30% of the allocation, and collateral-free loans are available up to Tk 10 lakh. Disbursement is managed through 23 partner banks and NBFIs, excluding businesses like grocery shops and pharmacies to ensure sectoral impact.
Loan Terms and Conditions:
Note:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The Digital Nano Loan is designed to provide small, quick, and collateral-free loans primarily for micro-entrepreneurs, small businesses, and individuals for various purposes such as:
Loan Terms and Conditions:
Eligibility Criteria:
Loan Limit:
Tenure:
Note:
Non-Eligible Investments to avail Loan:
Required Documents:
Any other relevant documents that might be required from time to time
The Food Security / Agricultural Refinance Scheme by Bangladesh Bank aims to enhance national food security by supporting farmers with easy access to credit. The scheme finances a wide range of agricultural activities, including the cultivation of rice, wheat, maize, vegetables, fruits, and flowers, as well as livestock, poultry, dairy, and fisheries. It targets genuine farmers, especially small and marginal ones, to increase domestic food production. Loans under this scheme cannot be used to repay existing debts, and defaulters are not eligible. The initiative promotes inclusive agricultural growth and ensures sustainable food supply through timely and monitored loan distribution.
Loan Terms and Conditions:
Loan Limit:
Tenure:
Note:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
A startup is a newly established business, typically focused on innovative products or services aimed at addressing market gaps. These businesses are often driven by entrepreneurial spirit, with the goal of scaling quickly and achieving significant growth. Startups usually begin with limited resources but aim to disrupt existing industries through new technology or creative solutions. Due to their high-risk, high-reward nature, startups often rely on external funding from investors, venture capital, or government programs. They face challenges such as market competition, limited capital, and operational hurdles, but successful startups can evolve into large enterprises, contributing significantly to the economy.
Definition :
Startup refers to a business or industrial venture established by one or more entrepreneurs, typically technology-driven, that is founded or managed by a domestic or foreign entity. Such ventures are highly promising, scalable, and play an active role in producing innovative products or providing services. Moreover, the invention of new products/services/processes/technologies or the advancement of existing ones also qualifies as a startup. However, an initiative formed by restructuring or merging an existing business will not be considered a startup.
Key Features of a Startup:
Loan Terms and Conditions:
Start-up ventures may receive loans, investments, and equity financing under this scheme. The following conditions shall apply:
Note:
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Client Portion:
Any other relevant documents that might be required from time to time
The FSPDSME Project, funded by JICA and managed by Bangladesh Bank, provides two-step refinance and pre-finance support to Cottage, Micro, Small, and Medium Enterprises (CMSMEs). It aims to boost inclusive economic growth by offering affordable loans through Participating Financial Institutions (PFIs). The scheme prioritizes women entrepreneurs and underserved sectors, helping businesses invest in fixed assets, technology, and working capital linked to expansion. This initiative is part of Bangladesh Bank’s broader strategy to strengthen SME financing and promote sustainable development across the country.
Loan Terms and Conditions:
Eligibility of the End-Borrowers:
Note:
Non eligible Sector:
purchase of land, land use rights, payment of tax and import duties, working capital and cost of such activities as resettlement and other compensation cost and refinancing for existing loans.
Non-eligible for financing under the TSL scheme-Crop and fish production, Real estate, Finance, insurance, precious metal dealing, Bar and pub, Amusement, entertainment (except for amusement park, tourism, filmmaking and TV broadcasting), Weapon, ammunition, Anything harmful to the social stability.
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The FDIPP Project, supported by JICA and implemented by Bangladesh Bank, promotes foreign direct investment in Bangladesh through a two-step loan (TSL) scheme. It offers refinance and pre-finance facilities to Japanese-invested enterprises, joint ventures, and Bangladeshi firms with strong business ties to Japan. Loans are channeled via accredited Participating Financial Institutions (PFIs), focusing on manufacturing and infrastructure development in Economic Zones. The initiative aims to strengthen Bangladesh–Japan economic cooperation and accelerate industrial growth.
Loan Terms and Conditions:
Eligibility of the End-Borrowers:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Note:
Non eligible Sector:
purchase of land, land use rights, payment of tax and import duties, working capital and cost of such activities as resettlement and other compensation cost and refinancing for existing loans.
Non-eligible for financing under the TSL scheme-Crop and fish production, Real estate, Finance, insurance, precious metal dealing, Bar and pub, Amusement, entertainment (except for amusement park, tourism, filmmaking and TV broadcasting), Weapon, ammunition, Anything harmful to the social stability.
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The government of people’s republic of Bangladesh has constituted Green Products/Initiatives Project to develop Environment Friendly Products and Enterprise financed from Bangladesh Bank to provide medium- and long-term loans to Green Products/Initiatives through the accredited Participating Financial Institutions (PFIs).
LOAN TERMS AND CONDITIONS:
Eligibility of the End-Borrowers:
Note:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Eligible Investments area: (Details: SFD Circular No. 2 dated 30-August-2023):
Required Documents:
Additional documents may be requested from time to time.
The Technology Development Fund (TDF) is a refinance scheme launched by Bangladesh Bank to support export-oriented industries in upgrading their technology and enhancing competitiveness. With a fund size of BDT 1,000 crore, TDF helps businesses invest in areas like:
LOAN TERMS AND CONDITIONS:
Eligibility of the End-Borrowers:
Note:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Eligible Investments area: (Details: SFD Circular No. 2 dated 30-August-2023)
Required Documents:
Additional documents may be requested from time to time.
Bangladesh Bank has established the Green Transformation Fund (GTF) in local currency to promote sustainable growth in export-oriented and production-based industrial sectors aimed at establishing a green economy in the country. Under this fund, eligible customers will be provided with refinancing facilities in local currency (Taka) against bank financing following the payment of import value for capital machinery and spare parts.
LOAN TERMS AND CONDITIONS:
Note:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Eligible Sectors for Financing:
Required Documents:
Additional documents may be requested from time to time.
Large refinancing is the process of replacing or restructuring a company’s existing debt to improve financial stability. Businesses pursue refinancing to secure lower interest rates, extend repayment terms, or shift from variable to fixed-rate loans. This strategy helps reduce monthly payments, free up cash flow, and optimize capital structure. Companies may refinance proactively during favorable market conditions or reactively during financial distress. While refinancing can enhance credit quality and operational flexibility, it often involves costs like transaction fees or penalties. Ultimately, it’s a strategic move to strengthen a company’s financial position and support long-term growth initiatives.
The FDIPP Project, supported by JICA and implemented by Bangladesh Bank, promotes foreign direct investment in Bangladesh through a two-step loan (TSL) scheme. It offers refinance and pre-finance facilities to Japanese-invested enterprises, joint ventures, and Bangladeshi firms with strong business ties to Japan. Loans are channeled via accredited Participating Financial Institutions (PFIs), focusing on manufacturing and infrastructure development in Economic Zones. The initiative aims to strengthen Bangladesh–Japan economic cooperation and accelerate industrial growth.
Loan Terms and Conditions:
Eligibility of the End-Borrowers:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Note:
Non eligible Sector:
purchase of land, land use rights, payment of tax and import duties, working capital and cost of such activities as resettlement and other compensation cost and refinancing for existing loans.
Non-eligible for financing under the TSL scheme-Crop and fish production, Real estate, Finance, insurance, precious metal dealing, Bar and pub, Amusement, entertainment (except for amusement park, tourism, filmmaking and TV broadcasting), Weapon, ammunition, Anything harmful to the social stability.
Eligible Investments to avail Loan:
Priority Sectors:
Required Documents:
Any other relevant documents that might be required from time to time
The government of people’s republic of Bangladesh has constituted Green Products/Initiatives Project to develop Environment Friendly Products and Enterprise financed from Bangladesh Bank to provide medium- and long-term loans to Green Products/Initiatives through the accredited Participating Financial Institutions (PFIs).
LOAN TERMS AND CONDITIONS:
Eligibility of the End-Borrowers:
Note:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Eligible Investments area: (Details: SFD Circular No. 2 dated 30-August-2023):
Required Documents:
Additional documents may be requested from time to time.
The Technology Development Fund (TDF) is a refinance scheme launched by Bangladesh Bank to support export-oriented industries in upgrading their technology and enhancing competitiveness. With a fund size of BDT 1,000 crore, TDF helps businesses invest in areas like:
LOAN TERMS AND CONDITIONS:
Eligibility of the End-Borrowers:
Note:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Eligible Investments area: (Details: SFD Circular No. 2 dated 30-August-2023)
Required Documents:
Additional documents may be requested from time to time.
Bangladesh Bank has established the Green Transformation Fund (GTF) in local currency to promote sustainable growth in export-oriented and production-based industrial sectors aimed at establishing a green economy in the country. Under this fund, eligible customers will be provided with refinancing facilities in local currency (Taka) against bank financing following the payment of import value for capital machinery and spare parts.
LOAN TERMS AND CONDITIONS:
Note:
Financial Parameters/Loan Amount, Tenure and Interest Rate:
Eligible Sectors for Financing:
Required Documents:
Additional documents may be requested from time to time.