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Incentivizing Bangladesh’s shoemakers to be greener

Nadia Sharmin's picture


“200 pieces of Selfie are ready, please call them to collect,” Nurjahan, an entrepreneur selling a local brand “Selfie” shoes, tells her husband to call a local shop owner to pick up his order.

We recently visited Bhairab to get a first-hand look at one of the important industrial clusters in Bangladesh, where Nurjahan’s shoe microenterprise is located.

Bhairab is about 85-kilometer from the capital Dhaka, and its shoe cluster is well organized into around 7,000 factories of which 40 percent are micro factories (employing between two to seven workers). They are mostly family-run, producing low-cost shoes, mostly for the local market at prices as low as just Tk100 – or around $1.25 a pair. Virtually none of these factories have access to bank financing, although some access credit from NGOs. In Nurjahan’s shoe factory, about 45 women and 12 men work in five sheds. Over the last 30 years, her micro business has grown into a small enterprise.

Working conditions in Bhairab are challenging. The shops are lined in congested rows, made of corrugated iron.  Low-quality exposed electrical wire is everywhere. Outside, the tell-tale signs of rubbish and decay are evident; a large pile of off-cut leather and off-cut rubber is heaped under the spreading mango tree at the entrance to the cluster. More rubbish is piled in alley ways. We couldn’t find any systematic approach for handling the waste that managed to make it into the trash drums, which had been distributed by an NGO the previous year.  

Our visit to Bhairab was part of the preparation for a new project aimed at promoting environmental awareness and greener manufacturing techniques in industrial production and agro-processing sectors by providing supportive micro enterprise loans.

We spoke to the micro entrepreneurs to understand whether they would be interested to access low-cost microenterprise loans to clean up ensuing environmental pollution and adopt “greener” ways of operating.

The proposed Sustainable Enterprise Project will facilitate environmentally-focused micro-finance loans in parallel with grants to provide shared support services to the overall cluster. The proposed project will provide access to microenterprise loans through Bangladesh’s Palli Karma-Sahayak Foundation (PKSF) and its partner NGOs to adopt cleaner and greener methods of operation. Dhaka-based PKSF is a financial institution founded by the Government of Bangladesh to finance rural development and provide training.

To keep up with its vision of becoming a middle-income country by 2021, Bangladesh needs to ensure cleaner and greener productive activities. To achieve this, the proposed project envisions awareness-raising activities, along with creating joint facilities through a grant in conjunction with the proposed environmentally focused micro-enterprise loans.  The first step would be to incentivize these microenterprises to undertake such borrowing for green business

The proposed project design includes joint facilities, including a common leather cutting machine, related infrastructure schemes, and recycling facilities for leather, Rexine and rubber soles to benefit the entire cluster. 
PKSF, working closely with NGOs which strongly support greater environmental awareness, is convinced that there will be strong demand for such financial resources.

Supporting these types of small firms will contribute to Bangladesh’s overall development in a sustainable way.

And finally, since women tend to be the main borrowers in the micro-credit and the microenterprise space, we hope that this project could support local female entrepreneurship, stimulated by women such as Nurjahan.