The Embassy of Switzerland in Bangladesh Visits LightCastle’s Blended Finance Portfolio MSMEs

Senior delegates from the Embassy of Switzerland in Bangladesh and Swisscontact made a visit to LightCastle’s 8 portfolio MSMEs based in Rangpur, Nilphamari, and Bogra; the MSMEs are a part of LightCastle’s blended finance program for B-SkillFUL, aimed at preparing 100 MSMEs to become investment-ready and subsequently deploying a customized equity-linked instrument for selected MSMEs to support business growth.

From October 2021, LightCastle teamed up with SwissContact’s B-SkillFUL Phase II, which is a four-year program supported by The Embassy of Switzerland in Bangladesh, to source and provide business development support services to MSMEs in Furniture making, Leather, and Light engineering sectors across five districts in Bangladesh. In the first year, LightCastle is onboarding 100 MSMEs in the blended finance program.

Our approach consists of four broad components:

1. Deploy a blended financial tool – both debt (banks, MFIs, NBFIs, fin-techs) and equity-linked instruments (quasi-equity) – based on MSMEs specific capital requirements and partner with selected growth-ready MSMEs

2. Open new market opportunities for MSMEs by providing online and offline marketing and branding collaterals and partnerships with relevant private market actors

3. Build management capacity by delivering bespoke consultations and collective workshops on topics including financial literacy, digital literacy, MSME governance, and marketing

4. Prepare an investment-friendly business environment by helping chart business strategy and delivering lessons on transversal topics such as gender inclusion, decent working conditions et al.

In the first 6 months of the project, LightCastle has sourced 90+ MSMEs and started BDS activities for 30 MSMEs. Currently, the team is assessing MSMEs’ financial needs, conducting due diligence, and concurrently creating partnerships with financial institutions and private market actors. Over the next six months, LightCastle hopes to achieve all the project activities and set a new growth trajectory for these MSMEs.

B-SkillFUL Phase II is a skill and enterprise development program that aims to improve the productivity and competitiveness of MSMEs and create better jobs by promoting Business Development Services to at least 800 SMEs and Workplace Based Training to at least 13,000 new and existing workers. In addition, the program will also facilitate improved working conditions, gender equity, social inclusion, and more environmentally sustainable practices among participating MSMEs.

The visiting team was composed of Suzanne Mueller, Deputy Head of Mission, Embassy of Switzerland, Bangladesh; Mr. Sohel Ibn Ali, Senior Programme Manager – Economic Governance; and Ms. Ameena Chowdhury, Programme Manager – Income and Economic Development, Embassy of Switzerland. In addition, Mr. Cezanne Mujibul Hasan, Country Director, Swisscontact Bangladesh; Dajna Sorensen, Team Leader; and Mr. Makbul Hossain, Senior Manager, attended on behalf of the B-SkillFUL team with other zonal personnel.

The delegation visited 8 MSMEs in three different districts in the Light engineering and Furniture making sector. They also joined two other discussions with the Bangladesh Engineering Industry Owners Association (BEIOA), Rangpur Wing of Light Engineering Association, and Furniture Business Owners Association, Saidpur, to understand the economic, climate, and business environment in the respective areas.