No stimulus loans disbursed to CMSMEs

Show-cause notices issued against 24 banks, NBFIs

Anisul Islam Noor

1 October, 2020 12:00 AM printer

Bangladesh Bank (BB) has served show-cause notices on 24 banks and non-bank financial institutions (NBFIs) as they did not disburse any stimulus loans to the cottage, micro, small and medium enterprises (CMSMEs).

The central bank has also warned 25 banks and financial institutions for distributing a nominal amount of loans from the stimulus package to the CMSMEs.

The central bank instructed the banks and NBFIs to disburse the stimulus loans to CMSMEs by October.

The BB sent letters to those banks and NBFIs on Thursday, a BB official confirmed the Daily Sun.

Despite having five months passed since the announcement of the incentive package, some banks and financial institutions failed to disburse any loans to CMSMEs.

The letter also asked to complete the disbursement of loans to CMSMEs by October. Otherwise, action will be taken, BB warns.

According to BB source, entrepreneurs have complained to the central bank that they are not getting loans from the stimulus package. Despite repeated persuasion from the central bank, many commercial banks are not paying much attention to this issue.

On September 2, Bangladesh Bank Governor Fazle Kabir warned about the loans issue in a meeting with the heads of 25 banks and financial institutions. He directed the banks to disburse 100 per cent of the loans under the stimulus packages by October 31.

But most of the banks have not implemented this directive. Some 24 banks and financial institutions did not provide a single penny of loans from the stimulus fund. While 25 banks and financial institutions have disbursed a nominal amount of funds.  A total of Tk 28.01 billion has been disbursed to the CMSMEs till August 31, which is about 14 per cent of the total target of Tk 200 billion.