BB to launch Tk 100bn stimulus for CMSMEs

A CMSME will be eligible to get the highest Tk 5 million in loans under the stimulus deal. Microfinance institutions will be distributed the loans across the country.

The interest rate of such loan will be 14 per cent, of which the borrowers will pay 9 per cent while the government will pay the rest 5 per cent as subsidy.CMSMEs will get loans as working capital which has to be paid within five years while the government will provide interest subsidy for a year only.

Md Serajul Islam, spokesperson and Executive Director of BB, said the role of the incentive package announced by the government is important in facing the effects of the pandemic, saving the small entrepreneurs at the marginal level, creating employments and above all reviving economic activities.

“The CMSME sector plays a key role in the overall economic development of the country, especially in job creation and rapid poverty alleviation. But it is not possible to ensure the desired level of financial inclusion of entrepreneurs in these sectors in the banking channel alone,” he said.

A large portion of these sectors borrow through microfinance institutions (MFIs), in this context, a separate policy is required for the provision of incentive loans to the CMSME sector through MFIs and micro-lenders certified by the Microcredit Regulatory Authority (MRA), he added.

Bangladesh Bank will finance banks and financial institutions at 0.5 per cent interest. The banks and financial institutions will finance MFIs at 2.5 per cent interest. MFIs will be able to borrow up to 3 to 5 per cent of their existing loan balance from banks or financial institutions under the incentive loan fund.

A small lender can borrow from a maximum of three banks or financial institutions, but the total loan taken must be within the prescribed loan limits.The minimum term of the loan taken will be two years. Microfinance institutions will be able to disburse 45 per cent of their total loans to the trading sector and 55 per cent to the manufacturing and services sectors at the customer level.

To ensure proper utilization of the loans, micro-lenders need to continue regular monitoring at the customer level in their own management practices. However, in case of loan disbursement, customer selection, loan disbursement expenses, grace period, loan instalment, loan collection, loan classification will be handled per the existing policies of microcredit regulatory authorities (MRA).

Several new conditions have been set in the policy of microfinance institutions for obtaining loans from the stimulus package.