Bangladesh Bank (BB) has instructed the banks to expedite disbursement of stimulus package of Tk 20,000 crore to small and medium enterprises (SMEs) that are gasping for coping with the second wave of Covid-19.
SMEs are the worst affected sector and they need financial support immediately so that they could survive from the Covid-19 shocks and bounce back, said BB's chief spokesperson Serajul Islam.
Considering the overall situation of the second wave of Covid-19, he said the central bank has already extended the deadline for disbursing the stimulus package for cottage, micro, small and medium enterprises up to June this year.
The central bank has also introduced an electronic system to expedite implementation of the stimulus package for SMEs that are facing financial hardship since the outbreak of Covid-19 in the country.
The electronic system, generally known as 'dashboard' will help the central bank strengthen monitoring and supervision of credit disbursement and recover on this priority sector.
It is a digital system . . . it will help intensify monitoring and supervision on disbursement of stimulus package closely, said Sirajul Islam.
Under the automated system, both the BB and the scheduled banks are now able to supervise bank-wise different data including sanction as well disbursement of such loans on real time basis instead of weekly one, he said.
In April 2020, the government had declared the stimulus package to help SMEs cope with the economic slowdown caused by Covid-19 pandemic.
Banks had been able to disburse 72.31 percent of the Tk 20,000 crore package as of March 31, 2021 according to the central bank.
Earlier, the central bank had already extended the deadline twice due to slow disbursement of loans to the SME sector, which employs around 34 percent of the country's total workforce.
The stimulus scheme of three-year tenure acts as a revolving fund, meaning banks would disburse money recovering those from clients.
But banks have showed a lackluster performance of the package's disbursement in 2020.
The loans will be provided at a 9 per cent interest rate. Of the interest rate, 4 per cent will be borne by the borrowers and 5 per cent by the government.
Welcoming the decision to extend the loan disbursement deadline, former BB governor Dr Atiur Rahman said, SMEs should be given special attention for stimulus packages. As the proper and quick disbursement of stimulus packages is a challenge, the government must take steps to reach the money timely to SMEs through banks and microfinance institutions, said Atiur Rahman.
He said banks are not so much competent and they have also lack of experience on disbursement and recovery of loans. So, if cautionary measures are not taken, funds from incentive packages would not be reached the actual enterprises hit hard by the Covid-19, he added.
To ensure quick and proper disbursement of loans for SMEs, Dr Atiur Rahman suggested using digital financial platform to reach loans to needy SMEs.
According to SME Foundation's data, the number of SMEs in the country is about 78 lakh and their contribution to GDP now stands at 25 percent. The sector has a 13.53 percent share in the total credit of the banking sector.
