This report formulates strategic recommendations and tools for optimal access to the Green Climate Fund (GCF) for Small and Medium-sized Enterprises (SMEs) in Bangladesh.

Global context

Green and Climate finance is a critical enabling tool for developing country actors in addressing the developmental challenges exacerbated by climate change. However, a staggering disparity remains between this necessity and actual access.

While global climate finance averaged nearly USD 1.3 trillion in 2022-2023, a staggering disparity remains: less than 3% of these funds reached Least Developed Countries (LDCs). For the ten nations most affected by climate change, including Bangladesh, the share was less than 2%. This highlights a critical financing gap that hinders local resilience-building where it is needed most.

SME challenges in Bangladesh

SMEs in Bangladesh—particularly those in agribusiness, tourism, and cottage industries—face severe exposure to floods, cyclones, and landslides. This vulnerability is compounded by a lack of technical expertise and limited access to the financial planning tools necessary for Climate Change Adaptation (CCA) and Disaster Risk Reduction (DRR).

At the same time, SMEs in Bangladesh face numerous challenges in accessing climate finance, despite their crucial role as one of the primary drivers of economic growth and their disproportionate vulnerability to the effects of climate change.

Strategic recommendation

To bridge this gap, the creation of an SME-focused program tailored specifically to the Bangladeshi context will be a critical step in enhancing access to climate finance for the target group in Bangladesh. It recommends that such initiatives be delivered by Direct Access Entities (DAEs) or International Access Entities (IAEs) with a dedicated national focus, rather than being diluted within broader regional programs. This localized approach ensures that climate finance is both responsive and accessible to the primary drivers of Bangladesh’s economic growth.