As a young boy, Jamal Uddin lived on the street. Born to an impoverished family in the south-central district of Faridpur in Bangladesh, he worked as a helper on a bus while other kids were in school. When he got older, he worked in a factory making plastic pipes. He studied how the factory operated and by 2003 he had opened his own small business in the same industry in the southwestern town of Jessore. 

As word spread about the quality of his products, his company prospered. Despite his success, Jamal struggled to obtain a loan when he wanted to expand the business. In 2011, he found a solution. Through the IDLC Finance Limited, he secured a Tk1.5 million ($17,650) loan at market-competitive interest rates.

“It was an easy deal,” he recalls. “Unlike banks and other lenders, the IDLC people came to my factory to get the documents and it was hassle-free.” Jamal’s business has grown substantially since he was able to obtain the financing needed to expand. His increased income is used to support his family, including providing his three sons with the education he was not able to obtain as a child.

In 2012, Jamal only had three machines making pipes. By 2014, monthly sales had doubled with five machines and a widened marketing network. He was able to buy 1,000 square meters of land to build a new house near his ancestral home in Faridpur District. Jamal is now working hard to open a tube well foundry to further expand and diversify the business.

Financing Small Businesses for Development

Jamal Uddin was not alone in his struggle to obtain financing to expand his business. Bangladesh has about 1.5 million small and medium-sized enterprises, which employ 70%–80% of the non-agricultural labor force. Many of these businesses, especially those located outside urban centers, struggle to obtain financing for expansion and other needs. By one estimate, only 6% of small businesses in rural areas have traditionally been able to access credit.

“Bangladesh needs to close this rural–urban gap in order to graduate to the next level of development,” says Md. Kabir Hossain, a regional manager for IDLC Finance Limited. “Expanding small business in rural areas can boost employment.”

The Government of Bangladesh has recognized that these businesses are engines of growth that help millions of families put food on the table. In partnership with ADB, the government implemented the Small and Medium-sized Enterprise Development Project from 2009 to 2013. It was through this project that Jamal Uddin was able to get the loan he needed to grow his business.

“The small and medium-sized business sector offers immense opportunities for generating employment in Bangladesh,” says Bidyut Kumar Saha, ADB’s officer managing finance sector operations in the country.

The project made a $76 million credit line available to participating financial institutions that then lent the money on to small businesses.

Working with Women

Mamtaz Begum, a 60-year-old small business owner in the southwestern district of Jashore, could not have expanded her business without the help of the project. She received a Tk1 million ($11,765) loan in 2013 to increase her company’s production of battery accessories.

“This additional investment helped me to double my profits in a year,” she says, adding that she plans to use the additional revenue to diversify her business into motor parts trading. “Banks require a mortgage to disburse a loan, but I got a loan without a mortgage, at a good rate of interest. This is amazing.”

“This additional investment helped me to double my profits in a year.”

Mamtaz Begum, business owner

In Bangladesh, women own less than 10% of businesses. The businesses tend to be smaller, recently started, and more likely to be informal and home based, compared with those owned by men. Women also tend to start businesses that enable them to balance family and household responsibilities. These are all factors that make it difficult to obtain loans from traditional banks.

To address these issues, the project provided loans to women entrepreneurs at a 10% interest rate, which was at least 7 percentage points lower than the usual market rate. The project trained 540 women entrepreneurs in small business management and familiarized them with the procedures to access institutional finance.

During 2010–2014, the number of women entrepreneurs applying for loans grew by 32.6% per year with more than 8,300 women-owned small and medium-sized businesses receiving loans. The number of women-led small businesses increased by 10% in three pilot districts of the project and the number of women entrepreneurs borrowing increased from 13,831 in 2010 to 42,730 in 2014.

Creating jobs, lowering poverty

“I now employ 35 people and make a net profit of over Tk1 crore ($117,647) a year.”

Jamal Uddin, business owner

Between 2010 and 2013, the project created more than 8,900 new jobs by extending credit to small businesses.

For Jamal Uddin, who in 2013 received another loan of Tk1.4 million ($16,470) to expand his operations further, the project provided an opportunity for him to help others avoid the kind of poverty he experienced as a child.

“After leaving home, I became a boy on the street. By the grace of the Almighty, I now employ 35 people and make a net profit of over Tk1 crore ($117,647) a year,” says Uddin.

Results Chain

Icon: ADB operational priorities - Addressing remaining poverty and reducing inequalities


  • $76 million loan approved on 17 September 2009
  • $500,000 technical assistance grant
  • Directly financed 13,645 SMEs, of which 6,589 (48%) were new companies
  • 15% average annual increase in SME borrowers (2010-2014)

Learn more about ADB's work in Bangladesh.

This article was originally published in Together We Deliver, a publication highlighting successful ADB projects across Asia and the Pacific that demonstrated development impacts, best practice, and innovation.