The emergence and rapid growth of RMG sector as a whole has introduced new opportunities for small and medium scale RMG producers in Pabna and Natore. In 2017, OSACA received a three year $0.50 million grants from PKSF and IFAD under the project PCAE, to help mini RMG entrepreneurs benefit from this rising demand. OSACA launched the project “Increase Income and Employment through Development of Mini Readymade Garments Micro-enterprise” that aimed to increase income and additional job opportunities for the mini RMG entrepreneurs by improving their product quality and forming new market linkages with both backward and forward market actors.

In addition to helping the entrepreneurs establish and improve their RMG business, OSACA facilitated intensive technical training to boost productivity and quality of finished goods. OSACA also sanctioned 30 crore Taka loan to 1,700 micro, small and medium enterprises (MSMEs) to help business expansion. At the same time, the project worked with industry partners to optimize the firm-to-market value chain of mini RMG sector and help the MSMEs develop commercial relationships with large buyers or trading companies.

During the three years of the project (2017-2020), OSACA demonstrated a number of good practices and innovative working models that have resulted in new insights into ways of improving the MSME’s businesses and livelihoods of associated market actors through value chain interventions. This report has been compiled to highlight specific best practices and lessons learnt across the mini RMG sector in Pabna and Natore.

Key lessons learnt from the project implementation:

• Product diversification leads to higher business success
• Incubation Approach is key to success to continue development of mini RMG sector
• End market of RMG demands product diversity
• Export markets have high potential to drive the business
• Buyers focus on quality, not quantity
• Modern machines are more likely to improve production efficiency and income
• Financing can facilitate sectoral growth, other innovative financing methods must be sought out
• There is significant demand for RMG items in the forward markets, but active promotions are required to sustain demand
• Engagement of BGMEA, BKMEA and local authorities must be sought out to make mini RMG sector sustainable
• Buyers’ demand pulls a key change, leading to business success of the MSMEs
• Strategic shift by the MSMEs favours more investment and return
• MSMEs showed positive response towards upgrading their factories
• Use of marketing techniques and tools increases sales lead

For further programming, the project is better consider taking a holistic approach instead of segmented interventions and builds the interventions using a logic model (results chain). This would help the project to think systemically and help the solutions to address the core problems. The emerging areas of investment (in form of grants) could be capacity building of the producers considering Industrial Revolution 4.0, developing innovative financing model which could achieve scale, and developing the online markets for RMG sector etc.

Duration of the Project

The duration of the project: From November 11, 2017 to December, 2020.

Budget of the Project

The total budget of the sub project is BDT 4,69,45,000/- where PACE project contribution is BDT 4,25,00,000/- and OSACA’s contribution is BDT 44,45,000/-.

Table 7: Project participants:

Table 8: Working Area of PACE Project

Progress of Mini Readymade Garments Sub-Project up to December 2020