Palli Sanchay Bank: A Beacon of Hope for Rural Businesses in Bangladesh

Bangladesh is home to a vibrant rural economy powered by small businesses and entrepreneurs. However, limited access to finance has hindered the growth of these enterprises. Palli Sanchay Bank is helping change that by providing much-needed financing to rural businesses on easy terms.

The Financial Struggles of Rural Entrepreneurs

Rural entrepreneurs in Bangladesh face immense challenges in securing funding to start or grow their businesses:

• High-interest rates from microfinance institutions, often 20-35%. These rates make loans unaffordable.
• Short loan terms of 10-12 weeks from microcredit lenders. Borrowers must make weekly repayments, leaving little capital for investments.
• Social and cultural barriers that limit women entrepreneurs' access to inheritance and finance. Bangladesh ranks 97th out of 106 countries in women's financial inclusion.
• Lack of financial literacy and access. Only 40% of Bangladeshi adults have access to financial services and products. This forces reliance on informal money lenders charging exorbitant rates.

These limitations trap rural entrepreneurs in poverty cycles, stifling incomes, development and quality of life.

Palli Sanchay Bank - Tailored for the Rural Economy

Palli Sanchay Bank was established in 2014 to transform the financial freedom of rural populations. Jointly owned by the Bangladesh government (51%) and One House One Farm project participants (49%), the bank has an authorized capital of Tk 10 billion.

Its objectives align perfectly with the needs of rural businesses:

• Increase savings for low-income individuals
• Provide easy loan assistance
• Help every home become a profitable farm
• Enable the poor to attain financial independence through enterprise

For example, during the COVID-19 crisis, the bank launched Grain Stock Loans allowing farmers to store produce rather than sell at low prices. These collateral-free loans carried only a 5% service fee, saving farmers from relying on the 27% charged by microcredit programs.

Empowering Rural Entrepreneurs

Palli Sanchay Bank focuses squarely on uplifting rural entrepreneurs through financial inclusion. Some key initiatives include:

• Low-Interest Loans - Interest rates between 8-12% on small business loans, enabling affordability.
• Long-Term Financing - Flexibility in loan tenures up to 10 years, supporting long-term investments.
• Financial Literacy - Programs on savings, credit management, and financial planning.
• Women Empowerment - 60% of borrowers are women. Loans help them launch farming and handicraft ventures.
• Digital Payments - Mobile banking services bring secure digital payments to remote regions.
• Rural Development - Financing for renewable energy products, tube wells, tractors, seeds, sheds, and more.

These tailored services are transforming rural Bangladesh. Palli Sanchay Bank loans have already supported over 200,000 small businesses and farms. Incomes are rising, and enterprises are growing rapidly with easier access to fair credit.

As financial inclusion accelerates across Bangladesh’s villages, rural entrepreneurs are gaining the tools to turn profitable farming and microenterprises into thriving small businesses. Palli Sanchay Bank is leading the charge on equitable rural finance.