The COVID-19 MSME Fund Nepal was launched in October 2020 with the objective of supporting pandemic impacted MSMEs through interest/collateral free loans to meet their working capital needs. In addition, this fund aimed to provide technical assistance to these MSMEs in the form of business development services. The COVID-19 MSME Fund leverages grant support from Swiss Agency for Development and Cooperation (SDC) and FMO – the Dutch Entrepreneurial Development Bank. This blended finance program has enabled our three partner banks in Nepal - Laxmi Bank, NMB Bank and Nabil Bank, to lend off their own balance sheets. The success story for this fund spans across 100 approved loans out of 1487 applications which has seen a total of NPR 170.8 mil. The fund has allowed a total retention of 1111 jobs, out of which, 493 belonged to women. In addition, business development services have been mobilized for 40 businesses.
Following its successful implementation in Nepal, OTW is pleased to take the COVID Fund to Bangladesh, one of the Emerging Economies in South Asia in collaboration with Truvalu.enterprises Ltd, Bangladesh and the Embassy of Switzerland in Bangladesh.
The COVID-19 pandemic has heavily affected the overall economy, trade, and business in Bangladesh. The most difficult challenges are being faced by SMEs which contributes 25% of the national GDP, creates employment for 7.8 million people and provides livelihood for 31.2 million people. Working capital shortage, loss of jobs, decline in sales, lack of access to finance, disruption in supply chain and in the worst case, loss of business are some of the issues being faced by SMEs. The COVID-19 pandemic has also impacted household and individual level earnings in Bangladesh with the lower and middle-income classes experiencing a significant drop in income over the last few months.
“Nasima worked in a readymade garment factory before the pandemic began. Her husband used to be a street vendor who set shop near the local police station and sold clothes. Nasima lost her tailoring job at the factory due to COVID-19. The factory she worked in has not reopened yet. For a while, her husband was the sole earner for their family of five members (three children). Eventually, her husband’s business also suffered because even after the lockdowns were lifted, the police have not allowed to set up shop at his previous location. His income halved because the advantage of the location was lost. Arranging for house rent (even through the lockdown months), electricity bills, and other expenses became difficult. The only help they received from the government was 5 kgs of rice in the four months, starting April. As the cost of living in the city became unbearable, Nasima and her family had to move in with their brother-in-law back to their native village. Right now, the family depends on savings and financial help from relatives. Nasima’s husband visited the local political party office for donations or help but to no avail. Nasima and her family are worried and are not sure how they might recover financially.”
One to Watch has teamed up with The Embassy of Switzerland in Bangladesh and Truvalu.enterprises to support MSMEs in Bangladesh with their business recovery and continuity. Through Swiss support, the MSMEs can access collateral and interest free loans and advisory support on improving their business processes. The project, launched in January 2022, is for one year and will support 15 MSMEs across Bangladesh. One to Watch will provide strategic support to Truvalu.enterprises in Bangladesh based on the successful implementation of COVID-19 MSME Fund in Nepal.