Poverty alleviation efforts in Bangladesh need to be accelerated to tackle the low rates of human development in this country of 140 million people. Economic growth – vital for poverty reduction – depends heavily on the private sector which comprises of 6 million small and medium-sized enterprises (SMEs), and contributes 25% to the national income. Millions of farmers also play a key role. These enterprises continue to grow, but face increasing competition from an increasingly globalised market. Improving competitiveness of selected sectors in which the poor participate as producers, employees and consumers is therefore essential for both private sector growth and impact on the poor.

KATALYST is one of the largest projects which work in the field of SME promotion. It started in 2002 and is currently active in more than 30 sectors: manufacturing sectors such as plastics, furniture, agro tools; agricultural sectors like pond fishery, vegetables, maize and poultry and in service sectors, e.g. accounting, marketing and quality management. KATALYST also works with business associations to improve the enabling environment for businesses. The project’s activities run nationwide with a special focus on areas in and around Dhaka, Faridpur, Rajshahi, Rangpur, Bogra and Jessore.

Phase I of the project, from October 1, 2002 to March 15, 2008, was funded by a donor consortium comprising of SDC, DFID and SIDA.
 
Given the project’s pro-poor impact in Phase I and the national and international relevance of the project as a source of innovation in the field of market-led development and pro-poor growth, SDC, DFID, CIDA and the Embassy of the Netherlands extended the project into a second five year phase, starting from 16 March 2008.