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The Bangladesh Small and Cottage Industries Corporation (BSCIC) has sought a Tk 1,000 crore stimulus package from the government to disburse loans for the development and expansion of the cottage industry and SMEs.
Existing entities and entrepreneurs in remote areas will be allocated Tk 500 crore while those seeking to start business afresh the rest, said the corporation functioning under the Ministry of Industries.
Mustak Ahmed, deputy secretary (BSCIC) to the ministry, sought the allocation in a letter to the Bangladesh Bank governor on August 23.
The BSCIC has already disbursed Tk 50 crore that was allocated under a stimulus package last fiscal year, BSCIC Chairman Mostaque Hassan told The Daily Star
Borrowers are to pay a 4 per cent interest for the loans having a repayment period of two years, including a six-month grace period.
However, entrepreneurs have already started paying instalments, right from the following month on receiving the loan, said Hassan.
The BSCIC plans to use the fresh allocation to run various programmes, including lending and demand-based training, under its own management and in light of its long experience, said Ahmed in the letter.
“In addition, the new, trained entrepreneurs will be able to accelerate the process of creating new entrepreneurs and jobs in the country by expanding their economic activities,” it read.
The BSCIC will provide a corporate guarantee if necessary, it said.
“We are the only organisation that lends to small entrepreneurs in 64 districts. We have the ability to lend Tk 5,000 crore. But we have requested Bangladesh Bank to allocate Tk 1,000 crore for the time being,” said Hassan.
In March last year, the government announced a Tk 20,000-crore stimulus package for cottage industries and the small and medium enterprise (SME) sector after the pandemic hit the country.
However, the disbursement rate of the loans was low compared to that for the large industrial and service sectors.
With small businesses still struggling to recover from the pandemic-induced economic slowdown, the government rolled out a fresh stimulus package in January involving Tk 1,500 crore.
Of this amount, the Finance Division has released Tk 570 crore, out of which Tk 276 crore has been disbursed. Of the eight government and semi-government agencies tasked with the disbursement, three could not give out any money.
The BSCIC has already given out the Tk 50 crore it received out of its allocation of Tk 100 crore.
(TDS)
