In order to help the cottage, micro, small, and medium-sized enterprises (CMSMEs) deal with the obstacles posed by the Covid-19 pandemic, the Small and Medium Enterprise (SME) Foundation will provide an additional Taka 450 crore to these businesses using both its own resources and a government stimulus package.
The foundation will provide low-cost financing at 6% interest, which is significantly less than the current bank rate of around 13%, to small and medium-sized firms who are having difficulty obtaining loans in order to grow their operations.
Small and medium-sized business owners are eligible to borrow up to Taka 25 lakh, with a minimum of Taka 1 lakh. However, business owners are only eligible for a maximum loan of Taka 50 lakh for the purchase of capital gear.
Loans of up to Taka 10 lakh will be disbursed without collateral.
The loans will be distributed through 19 private and state-owned banks and four non-bank financial institutions. The loan repayment period is fixed at 48 months, including a six-month grace period.
To this end, the foundation signed agreements with 23 banks and financial institutions on Tuesday at a hotel in the capital.
Sonali Bank, Bangladesh Agricultural Bank, Rajshahi Krishi Unnayan Bank, Karmasangsthan Bank, BRAC Bank, Bank Asia, Dhaka Bank, Eastern Bank, Mutual Trust Bank, NRB Commercial Bank, Mercantile Bank, Prime Bank, Premier Bank, City Bank, Southeast Bank, Shahjalal Islami Bank, Bengal Commercial Bank, United Commercial Bank, Trust Bank, IDLC Finance, IPDC Finance, LankaBangla Finance and United Finance were involved in the distribution of loans.
Signing the agreements were Salahuddin Mahmud, managing director (additional charge) of the SME Foundation, along with the CEOs of four financial institutions and 19 partner banks.
Among those in attendance were Md. Abdur Rahman Khan, Secretary of the Financial Institutions Division, and Senior Industries Secretary Zakia Sultana.
The signing of the agreement was presided over by Professor Md. Masudur Rahman, Chairman of the SME Foundation.
Nazim Hasan Sattar, general manager of the SME Foundation, gave a thorough rundown of the loan distribution policy.
As per the plan of SME Foundation, small and medium female entrepreneurs can access 30% of the total loan fund, while their male counterparts will receive 70%. Additionally, 10% of the loans from these two categories (male and female entrepreneurs) have been allocated to SME Foundation cluster entrepreneurs.
Of the loans distributed to women entrepreneurs, 50% will go to industries in the manufacturing and service sectors, while the remaining 50% will be allocated to industries in the value chain and other sectors.
For male entrepreneurs, 50% of the total loan amount will be distributed to the manufacturing sector, 25% to the service sector, and 25% to the value chain and other sectors.
The foundation will not disburse any loans to non-productive sectors such as grocery stores, drug dealers, hardware dealers, or any businesses that cause environmental pollution.
For giving loan, the foundation will prioritise lending to several key SME sub-sectors, cluster entrepreneurs, and value chain participants.
This includes entrepreneurs engaged in manufacturing exportable goods, producing import substitutes, and those involved in ICT and technology-based creative industries who have not yet secured loans from banks.
Additionally, loans will be extended to entrepreneurs operating in underdeveloped and tribal regions, as well as to physically challenged individuals and third-gender entrepreneurs.
Previously, the SME Foundation disbursed Taka 300 crore in loans to small and medium entrepreneurs as part of the government’s incentive package to mitigate the adverse effects of the coronavirus pandemic.
