Limited access to financial institutions, lack of a credit guarantee scheme, screening out of small entrepreneurs during financing appear to be some of major constraints for Small and Medium Enterprises' (SME's) development. What ought to be done to address the issue of access to finance? In Bangladesh, small enterprises contribute a little over three per cent and SME's all together around 25 per cent to the GDP while micro and small enterprises constitute almost 99 per cent of all enterprises. Statistics show that SMEs' contribution to the GDP has increased, but only at a slow pace. To improve the access to finances for SMEs Bangladesh could draw lessons from other countries. SME financing in Germany might be a good example, as it is considered to be the second most prosperous country due to its SME development. Germany's financing schemes for SMEs includes pro-SME institutional mechanisms, strong role of specialised public sector banks, subsidised credit to SMEs and institutionalised credit guarantee. The policy paper includes recommendations based on the experiences from Germany to tackle the constraints and policy or institutional obstacles of financing SMEs in Bangladesh.