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13 banks and 6 financial institutions have been able to achieve the target so far
The Bangladesh Bank (BB) has called for clarification from 14 banks and two non-bank financial institutions (NBFIs) and also sternly warned them for failing to achieve their Covid-19 stimulus loan disbursement targets in the cottage, micro, small, and medium enterprise (CMSME) sector.
Banks and financial institutions whose SME loan disbursement rate is below 50% have been warned.
The central bank said punitive measures would be taken against them if they fail to meet the target by this fiscal year.
The central bank said in a letter, that despite providing all the necessary policy support in the interest of implementing the CMSME incentive package at different times, the achievement of their targets in the first phase of the package (2020-21) is not satisfactory at all.
A Tk20,000 crore stimulus package was announced for the CMSME sector last year, and the 16 institutions met less than 50% of their disbursement targets until June 30 this year, according to a central bank statement.
Agrani SME Financing Company, GSP Finance Company (Bangladesh), Janata Bank, Habib Bank, Woori Bank, IFIC Bank, Meghna Bank, National Bank, NCC Bank, NRB Bank, Pubali Bank, Shimanto Bank, Al-Arafah Islami Bank, First Security Islami Bank, Global Islami Bank, and Standard Bank have failed to meet the target.
A central bank official told Dhaka Tribune that the importance of implementing a Tk20,000 crore stimulus package for the CMSME sector is immense, considering employment, positive contribution to GDP, elimination of economic inequality, and more.
He added that banks which have met 100% of their targets deserve praise as they set an example for other banks.
The 13 banks and six NBFIs that were able to fully meet the disbursement target are: United Commercial Bank; Brac Bank; Uttara Bank; Agrani Bank; Premier Bank; Bank Asia; Mutual Trust Bank; Eastern Bank; Prime Bank; Bangladesh Krishi Bank; Modhumoti Bank; Rajshahi Krishi Unnayan Bank; Commercial Bank of Ceylon; IDLC Finance; IPDC Finance; LankaBangla Finance; United Finance; Bay Leasing and Investment; and Prime Finance and Investment.
Overall, banks met around 77% of their disbursement targets.
According to the Bangladesh Bank, loans worth Tk15,338 crore were disbursed till June, which is 76.93% of the set target.
Last year, the government announced an incentive of around Tk115,000 crore in various sectors to address the loss of Covid-19 in the country’s economy.
(DT)
