SBAC Bank strengthens focus on SME financing and financial inclusion

Small and medium enterprises (SMEs) are the backbone of Bangladesh's economy. They generate employment, encourage entrepreneurship and contribute significantly to economic growth.

At SBAC Bank PLC, we firmly believe that sustainable development cannot be achieved without a vibrant SME sector. That conviction continues to shape our strategy and long-term commitment to expanding financial inclusion.

One of the biggest challenges facing SME entrepreneurs today is not simply collateral requirements or the cost of borrowing. The real issue is a combination of factors. Many entrepreneurs have promising business ideas but lack proper financial records, accounting systems and bankable documentation. This often makes it difficult for banks to accurately assess business risks and extend financing.

Since its inception, SBAC Bank has placed special importance on financing agriculture, cottage industries, and micro, small and medium enterprises. We are steadily working to increase the share of SME financing in our overall loan portfolio, with a long-term goal of allocating 50% of our total lending to this sector.

At the same time, businesses are grappling with rising raw material costs, market uncertainty and increasing cash flow pressures. Going forward, SME financing must gradually move beyond the traditional collateral-based model. Greater emphasis should be placed on cash flow-based lending, wider credit guarantee schemes and technology-driven credit assessment. These approaches can significantly improve access to finance for deserving entrepreneurs.

Since its inception, SBAC Bank has placed special importance on financing agriculture, cottage industries, and micro, small and medium enterprises. We are steadily working to increase the share of SME financing in our overall loan portfolio, with a long-term goal of allocating 50% of our total lending to this sector.

Through our expanding network of branches and sub-branches, we offer SME loans through simplified procedures and faster processing. Rather than applying a one-size-fits-all approach, we assess each entrepreneur based on the nature of the business, operational requirements and cash flow. We are also giving particular priority to agro-based industries, manufacturing enterprises, women entrepreneurs, startups and first-time business owners. Guided by Bangladesh Bank's policies and regulations, we remain committed to building a responsible, customer-centric SME banking ecosystem.

Over the past decade, SME financing in Bangladesh has grown considerably, with banks placing much greater emphasis on the sector than ever before. Nevertheless, a substantial financing gap remains considering the vast number of SME entrepreneurs across the country. Greater efforts are still needed to reach rural businesses, women-led enterprises, startups and first-time entrepreneurs.

Technology will play a key role in closing this gap. Technology-driven banking services, agent banking and simplified loan processing can significantly broaden access to finance. At SBAC Bank, we continue to invest in these areas to make banking more accessible and efficient for entrepreneurs across the country.

Women, young people and new entrepreneurs will play an increasingly important role in Bangladesh's future economic growth. However, many of them face common barriers, including limited business experience, inadequate capital and a lack of collateral. Addressing these challenges requires more than conventional lending.

Credit guarantee facilities should be expanded, financing should be made available on more favourable terms, loan approval processes should be faster and entrepreneurship development programmes should receive greater attention. Digital information platforms and alternative credit scoring systems can also make it easier to assess entrepreneurs with limited financial histories. Close collaboration among the government, regulators and financial institutions will be essential to building a more inclusive financial system.

At SBAC Bank, we offer a comprehensive range of SME financing solutions tailored to manufacturing, trading, service businesses, agro-based industries, women entrepreneurs and startups. Alongside financing, we provide specialised savings and current accounts, including our Surakkha Savings Account, digital banking through Fast Account, trade finance facilities, online payment solutions, cash management services and mobile wallet services through BanglaPay. Every financing solution is designed to match the specific nature and cash flow requirements of individual businesses.

Beyond financial products, we are also focused on bringing new and small entrepreneurs into the formal banking system. We have introduced simplified account opening procedures, need-based loan products, entrepreneurship development programmes and financial advisory services to support emerging businesses. Through our branches, sub-branches and agent banking network, we continue to expand banking services into rural and underserved communities.

Most importantly, we are moving away from relying solely on collateral when evaluating borrowers. By placing greater emphasis on business potential and cash flow, we aim to ensure that more promising entrepreneurs can access formal banking services and the financing they need to grow. We believe this approach will not only strengthen individual businesses but also contribute meaningfully to Bangladesh's long-term economic development.

The author S M Mainul Kabir, is the managing director & CEO of SBAC Bank PLC