Mamun Rashid

Constraints of Entrepreneurship
Development in Bangladesh
Policy Support
Outgoing CEO, Citibank, N.A. Bangladesh
27 MARCH, 2011
Entrepreneurship in Bangladesh
Factors such as political, social, cultural, technological, natural, and
personal shape up the overall development process of
entrepreneurship and its sustainability in long run.
Local economic factors such as size of the local market, supply &
demand generated by local purchasing power influence the
entrepreneurs’ business decisions.
Labor and its availability and price (wage) are also considered as
crucial factor in entrepreneurship development.
For New Entrepreneurs – Lack of Experience, Limited
Lack of proper information
Searching for source of Investment, Financing
Inflation, Political Instability, Lack of Social Security
Regulatory Challenges, Nepotism
Lack of Corporate Governance
Inadequate Infrastructural facilities
Implementation Challenges
The financial institutions, like banks, non banks and micro-finance
institutions extend support in the form of loans to the entrepreneurs
for business development.
In most of cases it has been found that the new and small-scale
entrepreneurs fail to repay the loan in time or there are recurring
past dues due to delay in project implementation. This discourages
the banks or Financial Institutions to support the new entrepreneurs.
There is limited availability of venture capital (VC) in Bangladesh.
The financial institutions cannot accept the proposal unless
complete information is provided. It is their observation that the
details provided by the applicants are based on assumption, and not
on currently available data.
For a country like Bangladesh, effective entrepreneurial initiatives can
play a significant role in development outcomes.
Bangladesh, with its high population density and widespread poverty, is
a challenging environment for development initiatives.
This huge pool of human resources can be used effectively for
economic growth by discovering their entrepreneurial capacities.
If this population can effectively be promoted with entrepreneurial skill
(engage, enrich, empower), they can significantly contribute to the
economic development.
Govt of Bangladesh had set up Small & Medium Enterprises (SME)
foundation in 2007
Equity Entrepreneurship Fund (EEF) was set up by Bangladesh
Palli Karma-Shahayak Foundation (PKSF) and MIDAS are also on
the supporting role.
While PKSF and MIDAS have played significant role in micro
entrepreneurship development, EEF could not play its due role due
to lack in commitment. SME Foundation is mostly focusing on
advocacy and capacity development.
The entrepreneurs on the ground need more support on business
plan development, various sources of funding, both equity and debt,
encouraging regulatory support , supportive law and order situation,
adequate marketing challenge and respectable financial
management skills.
Thank You