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Access of Missing Middle to Finance in Bangladesh

Corresponding Author : Afnaan Ahmed (afnaan.ahmed@northsouth.ed)

Authors : Afnaan Ahmed (afnaan.ahmed@northsouth.ed)

Keywords : Missing Middle, SMEs, MFIs, Financing

Abstract :

With the poverty rate is decreasing rapidly in the last 20-30 years, the emergence of middle-income people has increased. This has contributed to the rise of small and medium scale enterprises (SMEs) in Bangladesh. It is to be noted that, the SMEs play a significant role in the development of the economy and act as a driving force in the growth of the economy . But it is unfortunate to say that, this major group, also known as the missing middle, are hugely deprived of getting financial resources for their businesses. As a result, hampering their growth and also forcing them to get financial aid from unsecure places. For this paper, data have been collected from the statistics department of Bangladesh Bank for a deep analysis of this situation and to find out as to how much the missing middle get financial resources from the banks and financial institutions. In addition, survey data collected from secondary sources compare the credit given out to the missing middle by both banks and MFIs. The data analysis shows the state of the missing middle of missing out on financial resources from the banks and financial institutions to a great extent. The banks neglect the SMEs and force them to be dependent on MFIs and other informal sources. This negligence also hampers the growth of women entrepreneurs as they are deprived of securing proper and necessary fund for their business. Proper awareness must be raised regarding their situation and policies should be taken to aid and guide the SMEs, so that they can continue to be an asset to the economy of the country rather than being neglected.

Published on June 30th, 2022 in Volume 33, Issue 1, Social Sciences