South Asia

IFC Makes Issuing Trade Licenses Easier, Faster in Bangladesh Municipalities

July 24, 2012 -- Many businesses in Bangladesh are not official, simply because getting or renewing a license is cumbersome due to red tape. But that's beginning to change, thanks to a partnership between IFC and the Ministry of Public Administration. The partnership has launched pilot programs in three municipalities which have reduced the trade license issuance and renewal process to a single visit.

Informal operations constrained businesses in many ways by limiting access to finance and critical government services, and they resulted in revenue losses for the government. To help the government achieve its primary goal of introducing a unified and efficient trade license issuance and renewal process country-wide, IFC worked with the government to map the existing licensing processes, analyze bottlenecks, and propose unified licensing processes in the Cox’s Bazaar, Gopalganj, and Hobiganj municipalities.

The simplified model includes:

. A two-level approval process, rather than multiple sign-offs
. Renewal by a single official
. A mayor's delegation of authority to any mid-level municipal official to approve licenses
. Additional checks established for high-risk business licenses

Alhaz Gouse, mayor of Hobiganj, said, “The new licensing process will encourage entrepreneurs to register their businesses, provide more revenues to municipalities, and create jobs for the local market.”

The Ministry of Public Administration has ordered the three pilot municipalities to adopt the simplified process. The ministry has also asked IFC to roll the new process out in 312 municipalities, giving rural businesses more opportunities to grow. Through the improved licensing process, the government can now ensure better legal protection and financial services for businesses, while facilitating their sustainable growth.