Press release

European Commission joined the donor consortium of the International Finance Corporation's (IFC) small business initiatives, South Asia Enterprise Development Facility (SEDF) with a grant contribution 10 million euro (about 62 crore taka). The EC assistance will primarily be aiming at improving access to finance for the Small and Medium Enterprises (SMEs), providing capacity building services and enabling the business environment for SMEs in Bangladesh, Northeast India, Nepal and Bhutan.

"With the support of EC and our other donors, SEDF intends to channel international best practices, techniques, and tools for SME development to the region. SEDF would help establish enabling conditions for SME development. It has already identified specific constraints to SME development and, in partnership with governments, the private sector, bilateral/multilateral donor partners," said Anil Sinha, General Manager - SEDF/IFC.

SEDF is a multi-donor funded facility, promoted by IFC and managed by the SME Department of the World Bank Group. Its mission is to support the growth of small and medium enterprises (SMEs) primarily in the South Asia Region (SAR). SEDF was launched in October 2002 by a group of donors.

The European Community recognizes that the private business sector can make an important contribution to the overall economic development and help fight poverty. The Commission's assistance for SMEs in Bangladesh, through SEDF, will encourage private sector companies to enhance their competitiveness, gain access to modern technology, improve management and seek new markets. The support to SEDF is the way to translate into action the special emphasis put on the regional economic cooperation in the EC-Bangladesh Cooperation Agreement.

Although there are about 200, 000 registered private companies in the region but their ability to grow and increase competitiveness is constraint by a less than supportive business environment, a weak business support sector and difficulties in accessing long-term funds. Therefore, local small and mid-sized businesses are unable to reach their potential as source of job creation and poverty reduction.

SEDF will offer a broad range of support packages to facilitate some of the gaps these firms face in the local market, drawing on IFC's extensive prior experience with similar SME initiatives in other regions and its access to small business-friendly policy reform expertise as a member of the World Bank Group. SEDF is headquartered in Dhaka, and most of its activities would be in Bangladesh. SEDF will focus on four of its major components: Access to Financial Services, Capacity Building Services, Business Enabling Environment, and Special Projects.

Present at the formal functions where EC and SEDF signed agreements on behalf of their respective organizations amongst others were Esko Kentrschynskyj, Ambassador of the European Commission, Dimitris Tsitsiragos, Director, South Asia Department - IFC, and Hafeezuddin Ahmad, Country Manager - IFC, other senior SEDF/IFC managements and staffs, delegates from various missions and organizations and government officials

Delegation of the European Commission to Bangladesh
House 7, Road 84
Dhaka 1212
Bangladesh