Dhaka Bank Partners with PKSF for Tk 2,800 Crore MSME Financing Scheme

Dhaka, July 27, 2026 — Dhaka Bank PLC has signed a credit guarantee agreement with Palli Karma-Sahayak Foundation (PKSF) under the Credit Enhancement Scheme (CES) to promote greater financial inclusion and expand access to finance for marginal, cottage, and micro enterprises across Bangladesh. The partnership, supported by the Asian Development Bank (ADB), will enable participating banks and financial institutions to provide a total of Tk 2,800 crore in guaranteed loans during fiscal year 2026-27. 🤝

💼 The signing ceremony was held at the bank's head office in Sher-e-Bangla Nagar, Agargaon, Dhaka, with Md Hasan Khaled, Deputy Managing Director of PKSF, and Md Mostaque Ahmed, Deputy Managing Director of Dhaka Bank, signing the agreement on behalf of their respective organisations, according to a press release issued by the bank.

📊 Credit Enhancement Scheme: How It Works

🏛 The Credit Enhancement Scheme (CES) is a structured credit guarantee mechanism designed to address one of the most persistent challenges in micro, small, and medium enterprise (MSME) financing — the lack of collateral and credit history that prevents underserved entrepreneurs from accessing formal bank credit. Under the scheme:

• 💰 Tk 2,800 crore in guaranteed loans — total funding available under the scheme for FY2026-27
• 🤝 PKSF provides credit guarantee services — covering default risk on loans extended by participating institutions
• 👥 PKSF's Partner Organisations (POs) and Microfinance Institutions (MFIs) — act as intermediary lenders to microentrepreneurs
• 📍 Nationwide coverage — credit available to microentrepreneurs across all of Bangladesh

📊 By providing credit guarantees, PKSF enables banks like Dhaka Bank to extend financing to MSME borrowers who would otherwise be considered too risky for conventional bank lending. The guarantee mechanism effectively transfers a portion of the credit risk from the lending bank to PKSF, making it commercially viable for banks to serve underserved market segments.

🤝 Key Attendees at the Signing Ceremony

💼 The signing ceremony was attended by senior officials from both organisations, reflecting the strategic importance of the partnership:

• 👥 Md Fazlul Kader — Managing Director of PKSF
• 👥 Md Hasan Khaled — Deputy Managing Director of PKSF (co-signatory)
• 👥 Md Mashiar Rahman — Deputy Managing Director, PKSF
• 👥 Akond Mohammad Rafiqul Islam — Deputy Managing Director, PKSF
• 👥 Md Mostaque Ahmed — Deputy Managing Director, Dhaka Bank (co-signatory)
• 👥 Mohammad Mahbubur Rahman Palash — Head of MSME and Emerging Business Division, Dhaka Bank

📊 The presence of multiple deputy managing directors from PKSF, alongside the head of MSME and Emerging Business Division at Dhaka Bank, underscores the strategic priority both organisations place on the partnership and the broader MSME financing agenda.

🌏 ADB's Role and Support

🤝 The initiative is supported by the Asian Development Bank (ADB), which has been a long-standing partner in Bangladesh's efforts to expand financial inclusion and strengthen MSME access to formal credit. ADB's support for the Credit Enhancement Scheme reflects the multilateral lender's recognition that MSME financing is a critical constraint on inclusive economic growth in Bangladesh.

📊 ADB's involvement provides several benefits to the scheme:

• 💰 Financial support — contributing to the credit guarantee fund
• 🏛 Technical assistance — supporting scheme design and implementation
• 📱 International best practices — drawing on ADB's global experience with MSME credit guarantee schemes
• 🤝 Credibility — ADB endorsement signalling scheme quality to participating banks
• 📜 Monitoring framework — ensuring transparent use of funds and impact measurement

💰 Tk 2,800 Crore: Scale of the Commitment

📊 The Tk 2,800 crore in guaranteed loans available under the scheme for FY2026-27 represents a significant commitment to MSME financing in Bangladesh. To put this figure in context:

• 💰 Tk 2,800 crore = approximately $255 million (at current exchange rates)
• 👥 Potential to reach tens of thousands of microentrepreneurs — depending on average loan size
• 🏛 Geographic reach across all of Bangladesh — including rural and underserved areas
• 📈 Leverage effect — credit guarantees enable multiples of lending beyond the guarantee fund itself

💼 The scale of the commitment reflects both the demand for MSME financing in Bangladesh and the strategic priority that PKSF, ADB, and participating banks like Dhaka Bank place on expanding financial inclusion. For microentrepreneurs who have historically been excluded from formal credit markets, the scheme represents a potentially transformative source of business financing.

👕 MSME Sector's Importance to Bangladesh's Economy

📊 The MSME sector is a critical component of Bangladesh's economy, contributing significantly to employment, GDP, and export diversification beyond the dominant readymade garment (RMG) sector. However, MSMEs have historically faced substantial financing constraints:

• 👥 Employment generation — MSMEs employ a large share of Bangladesh's workforce
• 🏭 Economic diversification — supporting sectors beyond RMG including agro-processing, light engineering, and services
• 💰 Credit gap — IFC estimates suggest a substantial MSME financing gap in Bangladesh
• 📍 Rural economic development — MSMEs are particularly important for rural employment and income generation
• 🤝 Women's entrepreneurship — many microentrepreneurs are women, particularly in cottage industries

⚠ Despite their economic importance, MSMEs in Bangladesh have long struggled to access formal bank credit due to lack of collateral, limited credit history, and the high cost of serving small loan accounts. The Credit Enhancement Scheme addresses these structural barriers through the credit guarantee mechanism, making it commercially viable for banks to extend financing to underserved MSME borrowers.

🤝 PKSF's Role in Bangladesh's Financial Inclusion Architecture

🏛 Palli Karma-Sahayak Foundation (PKSF) is a apex development organisation established by the Government of Bangladesh in 1990 to support poverty alleviation through microcredit and microenterprise development. PKSF works through a network of partner organisations (POs) and microfinance institutions (MFIs) that extend financial services to underserved populations across the country.

📊 PKSF's role in the Credit Enhancement Scheme builds on its three-decade experience in microfinance and its established network of POs and MFIs. By partnering with commercial banks like Dhaka Bank, PKSF is helping to bridge the gap between formal banking and microfinance sectors — creating new pathways for capital to flow from commercial banks to microentrepreneurs through established microfinance distribution channels.

💼 Dhaka Bank's Strategic Positioning

🏢 For Dhaka Bank PLC, the partnership with PKSF represents a strategic positioning in the MSME financing space — a segment that Bangladeshi banks are increasingly targeting as they seek to diversify their loan portfolios and respond to policy incentives for financial inclusion. The bank's involvement in the Credit Enhancement Scheme signals its commitment to:

• 👥 Financial inclusion — reaching underserved market segments
• 💰 Portfolio diversification — expanding beyond corporate and retail lending
• 🤝 Policy alignment — supporting government and multilateral financial inclusion agendas
• 🌏 MSME ecosystem development — contributing to broader economic diversification
• 📊 Risk management — leveraging credit guarantees to manage MSME lending risks

📜 Comparison with NCC Bank PKSF Partnership

📊 The Dhaka Bank-PKSF partnership follows a similar arrangement signed earlier by NCC Bank with PKSF to expand financing for micro enterprises. The growing participation of multiple commercial banks in the Credit Enhancement Scheme reflects the maturing of Bangladesh's MSME financing ecosystem and the increasing alignment between commercial banking and microfinance sectors.

💼 This trend is significant because it represents a structural shift in how MSME financing is delivered in Bangladesh — moving from a model where microfinance institutions operated largely separately from commercial banks to one where the two sectors collaborate through credit guarantee mechanisms that leverage each sector's strengths.

🚢 Broader Macroeconomic Context

📊 The partnership comes at a critical moment for Bangladesh's economy, with several macroeconomic factors underscoring the importance of MSME financing expansion:

• 📉 GDP growth slowdown — GDP growth has averaged around 4% in recent years, well below historical trends
• 🏭 Industrial sector contraction — industrial growth turned negative at -0.28% in FY2026
• 👕 RMG sector pressure — export-dependent RMG sector facing headwinds from US tariffs and weak global demand
• 💰 Banking sector stress — rising NPLs constraining banks' capacity to extend conventional credit
• 👥 Job creation imperative — MSMEs critical for employment generation amid slower formal sector growth

🌏 By expanding MSME financing through credit guarantee mechanisms, partnerships like the Dhaka Bank-PKSF arrangement contribute to multiple policy objectives simultaneously — financial inclusion, economic diversification, employment generation, and rural economic development. The Tk 2,800 crore commitment under the scheme for FY2026-27 represents a meaningful contribution to these broader economic objectives.

📈 Looking Ahead

🤝 As the Credit Enhancement Scheme rolls out through Dhaka Bank and other participating institutions, attention will focus on the speed and effectiveness of loan disbursement to microentrepreneurs, the geographic distribution of financing, and the loan performance under the guarantee mechanism. The success of the scheme will depend on:

• 👥 Effective outreach — reaching genuinely underserved microentrepreneurs
• 📱 Streamlined processes — minimising bureaucratic delays in loan approval and disbursement
• 💰 Appropriate loan products — designing financing that matches MSME cash flow patterns
• 📜 Robust monitoring — tracking loan performance and impact
• 🤝 Sustainable defaults — maintaining loan quality to ensure scheme continuity

🌏 For Bangladesh's broader financial inclusion agenda, the Dhaka Bank-PKSF partnership represents a positive step towards building a more inclusive financial system that serves the full spectrum of the country's entrepreneurs — from large corporations to microenterprise owners in rural areas. As the scheme scales, it has the potential to make a meaningful contribution to Bangladesh's economic diversification and inclusive growth objectives in the coming years.