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Supply Chain Finance in Bangladesh: Unlocking Growth for Exporters

Aug 26, 2025
Supply Chain Finance in Bangladesh: Unlocking Growth for Exporters

Bangladesh has built one of the most dynamic export sectors in the world. Ready-made garments, footwear, home textiles, leather goods, and agro-processing have pushed the country to become a global supplier. Factories across Dhaka, Narayanganj, Gazipur, and Chattogram keep millions employed, driving more than 80 percent of export earnings.

Yet beneath the success lies a challenge that threatens growth. Exporters face long payment cycles, rising borrowing costs, and restricted access to foreign exchange. For many small and mid-sized suppliers, cash flow is the biggest obstacle standing between them and their next order.

The financing gap for exporters in Bangladesh

Bangladesh’s economy continues to grow, but exporters struggle to finance working capital. Lending rates hover around 12 percent, and inflation remains close to double digits. Banks, already burdened by rising non-performing loans (around 24 percent of total loans), are cautious with new credit.

This means collateral-based loans go mostly to large corporates. SMEs, which make up more than 99 percent of firms and contribute around 25 percent of GDP, are often excluded. The gap is even wider for women-led SMEs, with IFC studies showing the majority of their financing needs unmet.

Exporters also face foreign exchange constraints. Shortages of dollars have delayed and denied letters of credit, slowing raw material imports and hurting production. Working capital is trapped in invoices that take 60 to 120 days to settle, leaving suppliers exposed just when buyers demand faster delivery and consistent quality.

Export financing opportunities in Bangladesh

Bangladesh Bank has introduced reforms that create new opportunities for exporters. Rules now allow shipments under open account exports, backed by payment undertakings and credit insurance. This enables suppliers to access non-recourse receivables finance — early payment against invoices — without adding new bank debt.

For exporters, this is a game-changer. Supply Chain Finance (SCF) can transform locked-up receivables into immediate liquidity, bridging the gap between production costs and delayed buyer payments.

How Supply Chain Finance adds value

Supply Chain Finance directly addresses the financing challenges of Bangladeshi exporters:

  • Liquidity without collateral. SCF is based on the buyer’s credit quality, not the supplier’s collateral. This allows SMEs and tier-two or tier-three factories to access finance that banks would normally decline.

  • Faster cash cycles. Instead of waiting 60–120 days, exporters receive cash at shipment or invoice approval. This shortens the cash conversion cycle and stabilises operations.

  • Debt-free balance sheets. Non-recourse export receivables financing improves liquidity without increasing leverage, keeping suppliers in a healthier financial position.

  • Resilient supply chains. Large buyers benefit as well. Their suppliers become more reliable, production stabilises, and costs are controlled, strengthening Bangladesh’s competitiveness in global markets.

Sectors that can benefit most

  1. Ready-made garments and textiles. With more than $36 billion in export earnings in FY24, this sector remains the lifeline of the economy. Smaller mills and trim suppliers face the harshest financing gaps.

  2. Leather and footwear. A fast-growing export sector that faces similar challenges in buyer payment terms and access to bank finance.

  3. Home textiles and jute. High-demand categories with shorter order runs, often underserved by traditional credit lines.

  4. Agro-processing. Seasonal exporters need working capital to meet demand from GCC and EU markets.

Why Supply Chain Finance is right for Bangladesh now

Globally, the trade finance gap has widened to $2.5 trillion, with SMEs most affected. Bangladesh, with its export-driven economy, is at the centre of this challenge. The country’s exporters have proven their resilience, but to keep pace with international demand, they need modern financing tools.

Supply Chain Finance is not just another loan product. It is a partnership that aligns exporters, buyers, and financiers. It frees up working capital, reduces dependency on traditional bank loans, and builds resilience across supply chains.

Building resilient supply chains

Bangladesh exporters have a proven ability to compete on the world stage. With Supply Chain Finance, they can move from surviving cash flow gaps to thriving in global trade. By unlocking receivables and stabilising liquidity, exporters can invest in growth, meet buyer expectations, and strengthen the country’s position in international markets.

At Convergence Capital Group, we specialise in designing Supply Chain Finance programmes for exporters in Asia. Our solutions help companies bridge working capital gaps, stabilise liquidity, and scale without adding new debt to their balance sheets.

If you are an exporter or an anchor company, now is the time to explore how SCF can unlock growth for your business and strengthen Bangladesh’s place in global trade.


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CONVERGENCE CAPITAL GROUP

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