Dhaka: The Palli Karma-Sahayak Foundation (PKSF) is planning to increase financing for small entrepreneurs to enhance production capacity, promote intermediate goods production, and create new employment opportunities across the country. Under the new financing strategy, the PKSF plans to provide loans of up to Tk 50 lakh to general small entrepreneurs and up to Tk two crore to entrepreneurs producing intermediate goods in selected business clusters.
According to Bangladesh Sangbad Sangstha, PKSF Managing Director Md. Fazlul Kader disclosed the plan in a recent interview. He stated that a small enterprise that directly employs one person can create employment opportunities for around four more people through forward and backward linkages with production and marketing systems. "So, we don't want to focus only on increasing the number of entrepreneurs. We want to finance the entire production and supply system to increase employments," he emphasized.
The PKSF managing director mentioned that the organization now focuses on employment generation, as increased production creates jobs among suppliers, distributors, and other businesses linked to an enterprise. The new financing strategy also aims to encourage entrepreneurs to add value to raw materials and produce higher-value products. "Bangladesh should not remain merely a producer of primary products. We have to add as much value as possible to raw materials," he remarked.
He provided examples such as processing milk into ghee, labang, cheese, and various beverages, and processing mangoes into pulp, vinegar, and other products. These businesses require higher capital than conventional microcredit, leading the PKSF to plan to raise the financing ceiling.
The PKSF managing director cited the footwear industry in Bhairab as an example of the potential for producing intermediate goods. He explained that several thousand footwear factories in the area require shoe soles, which can be produced from footwear waste, though such businesses require relatively higher investment. "People do not buy soles only for personal use; footwear factories buy them. That is why we call them intermediate goods," he clarified.
Supporting small manufacturing enterprises can create new products while also generating employment in related industries. Fazlul Kader stressed that the actual employment impact of a small enterprise cannot be assessed by looking at the enterprise in isolation.
He emphasized that an enterprise remains connected to several stages involving raw-material supply, production, transportation, marketing, and distribution. Therefore, the PKSF wants to bring the entire value and supply chain under its financing framework to expand employment opportunities. The PKSF has been working for around 36 years to develop entrepreneurs and create employment, focusing not only on the volume of financing but also on its outcomes.
Alongside improving production and supply-chain efficiency, the PKSF is assessing how much employment its financing creates. Fazlul Kader mentioned that the Bangladesh Bank has arranged a Tk 5,000-crore credit line for the PKSF, and the first tranche of the funds has already been disbursed. The PKSF has maintained a loan recovery rate of around 99 percent for a long period, and while maintaining financial discipline, the organization is now giving greater importance to the impact of its financing on production and employment.
Regarding the expansion of PKSF activities to improve value chains, he noted that some problems cannot be resolved through loans alone. "The government also needs to provide grants for necessary infrastructure and other support in value chains," he stated.
Fazlul Kader concluded by saying that the PKSF has already worked with more than 400 value chains. Drawing on this experience, the organization plans to expand its activities nationwide with government support, expressing hope that the initiative will increase production as well as create more employment opportunities.