The major constraints to RNF growth,according to a large survey of rural entrepreneurs,'include (1) flood and natural disasters; (2) access toelectricity; (3) road conditions, (4) access to finance and(5) transportation to markets. Bangladesh'svulnerability to frequent floods and other natural disastersseverely hampers operations of more than a third of ruralfirms. The next most important constraint to RNF growth isthe lack of access to electricity, which is available toonly 19 percent of rural households (as compared to 31percent of all households). Third, Bangladesh ranks quitehigh in terms of road density; however - because of poorconstruction of roads and bridges, lack of maintenance ofroads and waterways, lack of integration of different modesof transportation due to inefficiencies at the containerport and in the rail system - road conditions andtransportation to markets are reported to be severe problemsby 36 and 18 percent of rural firms, respectively. Inaddition, inadequate access to investment finance and t oworking capital disproportionately affects small andmedium-sized firms(the "missing middles"). Thelack of access to telecommunications adversely affects thestart up, growth, and performance of the micro small andmedium sized (MSM) firms. As most of the constraintsimpeding RNF growth relate to the provision of public goodsand services, and to macroeconomic and trade policies, thegovernment has a critical role in removing theseconstraints. Actual actions to remove these constraints havelagged significantly because of the country's lack of:(1) an institutional mechanism to mainstream RNF issues intorural development; and (2) a decentralized local governmentstructure capable of ensuring the efficient delivery ofservices to rural entrepreneurs. To unleash the growthpotential of the RNF sector and create a pro-poor virtuouscircle of rural growth, Bangladesh will need to implementthe two-pronged strategy of (1) maintaining an enablingrural investment climate, and (2) ensuring an institutionalset-up for the efficient delivery of services.