JBS Vol 07. Num 1. 2005 - BANK CREDIT FOR THE MISSING MIDDLE IN BANGLADESH

The contribution of small and medium industries to the growth of GDP in Bangladesh has increased in recent years.
This has happened despite their lack of access to formal bank credit--sources of finance being their own savings and
informal lenders. Based on two sample surveys of these industries conducted by the World Bank and other
organizations, and related documents, inferences are drawn that productivity of these industries could be improved if
their own savings could be complemented by borrowings from banks, NGOs, and other financial institutions in the
formal financial sector. This paper also analyzes the major issues involved, reviews the successful attempts by a
number of developing countries in augmenting the inflow of commercial bank and NGO funds to small and medium
industries, and suggests remedial measures suitable to conditions in Bangladesh.