USAID Feed the Future Bangladesh Inclusive Access to Finance (IAF) Activity, implemented by Palladium International in partnership with SAJIDA Foundation, successfully hosted a stakeholder consultation workshop on Thursday in Dhaka.
The event brought together policymakers, high officials from financial institutions, and other key stakeholders to validate the preliminary findings of the assessment “Access to Finance Landscape and Inclusive Development in Bangladesh” (AFLID).
Smallholder farmers and agri-businesses in Bangladesh continue to face significant barriers in accessing the financial resources they need to thrive.
The IAF Activity aims to address the challenges and enhance access to finance in the agriculture sector.
The assessment examined the current state of agricultural financing, focusing on barriers faced by agriculture MSMEs and farmers, particularly women and youth, and the roles of financial institutions and government agencies in improving access to agricultural finance.
The preliminary findings from the assessment showed that lending institutions face different barriers to agriculture lending, including high operation costs, information asymmetry and lack of financial literacy among borrowers, and unpredictable weather.
The workshop featured engaging discussions and valuable insights on the findings of the assessment. The participants validated opportunities to improve agriculture financing through developing specialized credit products, improving operational efficiency, creating a stronger and digitized system for assessing and distributing loans, and improving collaboration between the regulators and lending institutions.
Presiding as the chief guest at the event, Kazi Rafiqul Hassan, executive director of Bangladesh Bank emphasized the government’s commitment to addressing the barriers faced by the agriculture sector stakeholders.
He said: “The SME department of Bangladesh Bank is enforcing a rule that requires 25% of the total portfolio of banks' loans and advances to be allocated to the SME sector. Moreover, Bangladesh Krishi Bank and Rajshahi Krishi Unnoyon Bank are dedicated to agricultural financing, which will further enhance inclusive access to agricultural funding.”
The special guest at the event, Joseph Lessard, director, Office of Economic Growth, USAID Bangladesh, emphasized the need for all stakeholders to work together - “Achieving inclusive access to finance in Bangladesh is a complex challenge, particularly due to the challenges in reaching farmers, and other underserved communities in a cost-effective manner and with financial services that meet their needs. The government and the private sector must together play important roles in creating an ecosystem of financial services that meet the needs of farmers and agribusinesses.”
Among others, Alexis Polovina, Farzana Yasmeen, and Farhad Hossain from the USAID mission attended the workshop.
Nasir Ahmed, chief of Party, explained that the insights gathered from the workshop will be instrumental in shaping the activity’s strategy and efforts to enhance access to finance for smallholder farmers and MSMEs.