Out of 7.8 million enterprises in Bangladesh, 88% (6.86 million) are cottage enterprises that employ 13.16 million people. A further 11% micro enterprises create employment of 0.56 million. CMSMEs together represent 99.84% of the total enterprises in the country. Almost 80 per cent of the total employment in the industrial sector comes from CMSMEs making nearly 45-per cent value addition to the manufacturing sector. In aggregate, SMEs contribute to 25% of Bangladeshi GDP, as of 2018 it stands at 79 billion USD.
However, despite the significant contribution to Bangladesh economy, borrowing from the formal banking channel has been difficult for small enterprises, specifically which are located in rural areas, due to unclear definition, lack of required documents and deficient bank-client relationships. Even the complicated disbursement process, absence of bank account, and minimal scope of collateral have been creating barriers CMSMEs to obtain loans.
Zaytoon Business Solutions wants to make the loan products more accessible to rural CMSMEs through the “Village Digital Booth”.
The loan products will be offered in the following modes:
1. Agricultural Loan: It is a loan product for all kinds of agro-based and agro-processing industries available to CMSMEs and other special organizations engaged in the field.
2. Small Business Loan: The loan fulfills the working capital requirement of CMSMEs.
3. Revolving Short Term Loan facility: Any Small and Medium Enterprises (SME), whether it is manufacturing, service, trading or farming can avail this facility for working capital for payment of local procurement of inventory / raw materials and to meet any kind of short term urgent fund requirement.
4. Commercial Space Finance: A term loan product for the Small and Medium Enterprise customers who want to purchase, renovate or develop/construct commercial space.
5. Loan for CMSMEs for fixed capital investments: This will allow them to purchase Machinery, Equipments, Furniture, Vehicle, etc. for commercial uses.