Low-cost funds for women entrepreneurs

The cost of funds for women entrepreneurs has declined as the Bangladesh Bank yesterday said they would be able to borrow at a 5 per cent interest rate under one of its refinance schemes.

Both male and female entrepreneurs earlier could avail loans from the refinance scheme in the enterprise sector. Now, only women-headed businesses will get financing from the facility, according to a notice of the central bank.

The volume of the fund is Tk 1,500 crore.

The central bank has already set a target to give out at least 15 per cent of the SME loans to women entrepreneurs by 2024.

As part of the move, the central bank has taken the latest initiative to allow them to borrow from the banking sector easily. Women-owned enterprises now account for a maximum of 4 per cent of the total SME loans disbursed annually.

Under the scheme, banks and non-bank financial institutions will receive funds from the BB at 0.50 per cent interest rate. The lenders can charge a 5 per cent lending rate. The central bank doubled the volume of the refinance scheme in May last year to offset the impacts of the business slowdown stemming from the coronavirus pandemic.

It also lowered the lending rate to 7 per cent from 9 per cent at that time.