Define SME credit in light of BB's guidelines and mention the booster sector

SME Financing in light of BB's guideline

SME Financing: SME finance is the funding of small and medium sized enterprises, and represents a major function of the general business finance market – in which capital for different types of firms are supplied, acquired, and priced. Capital is supplied through the business finance market in the form of bank loans and overdrafts; leasing and hire-purchase arrangements; equity/corporate bond issues; venture capital or private equity; and asset-based finance such as factoring and invoice discounting.

Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. Formal SMEs contribute up to 60% of total employment and up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included.

  

[According to Bangladesh Bank (SMESPD Circular No.2 dated 29 June, 2017), the

cottage, micro & SME is newly defined the industry/enterprise:

Criteria	Fixed assets excluding land & building (Tk. in crore)				No. of manpower			Yearly Turn over (Tk. in crore)
Sectors
	Micro	Small	Medium		Micro	Small	Medium	Micro	Small
Manufacturing	0.1-0.75	0.75-15	15 - 50		16-30	31-120	121-300	-	-
Service	<0.1	0.1- 2	02-30		01-15	16-50	51-120	-	-
Trading	<0.1	0.1-2	1-15		1-15	16-50	11-50	<=1	>1 - <=12
Cottage	<0.1			1-15

An industry or enterprise can be treated as that category one following a benchmark but the same can fall under higher category if another benchmark is considered. In that case it will be treated as higher category industry.

A woman, who owns a private firm or she holds minimum 51% stake in firm run jointly or registered, will be treated as women entrepreneur.]

Booster sectors:

The ministry of industries, Government of Bangladesh identified eleven booster sectors. Those are -

1.     Electronics and electrical,

2.     software-development,

3.     light engineering and metal-working,

4.     agro-processing/agro-business/plantation agriculture/ specialist farming/tissue-culture,

5.     leather-making and leather goods,

6.     knitwear and ready-made garments,

7.     plastics and other synthetics,

8.     healthcare & diagnostics,

9.     educational services,

10.                         pharmaceuticals/cosmetics/toiletries and

11.                         fashion-rich personal effects, wear and consumption goods.