As part of the government's plan to create employment and help small entrepreneurs, banks and non-bank financial institutions have disbursed soft loan of Tk 6,255.65 crore among 58,261 new entrepreneurs across the country amid Covid-19.
"At the end of March this year, more than Tk 6,255.65 crore soft loan has been disbursed to cottage, micro, small, and medium enterprises (CMSMEs) without collateral," said a source of Bangladesh Bank (BB).
Sources said CMSME entrepreneurs have been hit hardest by the ongoing Corona pandemic and as their resources are limited, they need to be given soft loans for keeping their production unaffected.
Earlier, the central bank relaxed policies to encourage banks to disburse loans for CMSMEs.
Of the total Tk 6,255.65 crore, the amount of loan disbursed without collateral is Tk 5,040.06 crore and the number of beneficiaries reached to 50,308 at the end of March this year.
According to the central bank's CMSME sector data, five state-owned banks have given loans worth Tk 99.64 crore to 3,836 small entrepreneurs till March this year while 30 private sector commercial banks have disbursed loans of Tk 4,247.06 crore among 31,312 entrepreneurs.
In order to provide soft loans to small entrepreneurs, the government gives guarantee for these loans under the Credit Guarantee Scheme, sources said, adding that the government should further increase the funding under Credit Guarantee Scheme. At the same time, an effective strategy needs to be taken to accelerate the overall development of the CMSME sector.
According to the BB, eight Shariah-based Islamic banks have lent Tk 394.35 crore to 2,946 small entrepreneurs while foreign banks have lent Tk 265.41 crore to 11,755 small entrepreneurs. Besides, non-bank financial institutions have given loans of Tk 1,214.06 crore to 5,975 small entrepreneurs.
An official of Agrani Bank said the central bank has a directive to provide unsecured loans to the CMSME sector. In that light, it has been disbursing loans among entrepreneurs of the CMSME sector, the main driving force of the country's economy.
"In fact, the CMSME sector is playing an important role in the country's economy, including job creation. At present, the sector contributes about 25 percent to the gross domestic product (GDP). For this reason, Bangladesh Bank is also giving special importance to the expansion of CMSME sector," said a BB official.
As per the guidelines of Bangladesh Bank, the amount of loans in CMSME sector should be increased at the rate of 1 per cent per annum out of the total loan balance of banks and financial institutions. Thus, by 2024, at least 25 per cent of the total debt will have to be raised in the CMSME sector. Besides, at least 50 per cent of the loans disbursed in this sector should be given to cottage, micro and small (CMSE) entrepreneurs.
