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BB creates Tk 5b refinance fund for informal sector

  • Staff Correspondent
  • 6 September, 2021 12:00 AM
  • Print news

Bangladesh Bank (BB) has restructured a special refinance scheme of Tk 5 billion for small entrepreneurs in the informal sector, low-income professionals, marginal farmers and school banking account holders to support economic recovery from the second wave of the coronavirus pandemic.

The central bank issued a notification in this regard on Sunday.

“As a result, an individual can get a loan of up to Tk 0.5 million in individual categories and Tk 2 million in group categories,” said an official, adding that the borrowers would get three years time to repay the loan with a six month grace period.

The maximum interest on such type loans will be 7 per cent.

The BB has increased the volume of refinancing funds from Tk 2 billion to Tk 5 billion which will be a revolving fund for five years. Banks will get funds from BB at 1 per cent interest under the scheme.

The scheme focuses on increasing financial inclusion in society and the borrowers will have to open a bank account by depositing Tk 10-100 to get the loan facility.

The loan will be given on a priority basis to low-income professionals, and low-income people living in char and haor areas. Individuals with special needs and women entrepreneurs will funds from the scheme for income-generating activities.

The scheme will also prioritize increasing financial inclusion through school banking activities as well as human resource development and employment.

To create opportunities for disadvantaged and indigent school banking account holders (including students who have dropped out of school) banks can credit to guardians under the scheme for vocational/technical /information technology and other training.

According to the BB notification, the eligible individuals and professionals for this scheme are- goldsmith, barber, blacksmith, potter, fisherman, boatman, hawker, rickshaw puller/van driver, electric / electronic device repairman, electrician, carpenter, mason, painter, plumber, pickle/cake maker, weaver, animal shop owner, cloth shop owner, tailor owner, mobile clothing store, Flexi load service Provider, Mobile Financial Services Agent, Information Service Providers / Internet Service Providers, Floating Food Stores, Tea-stall, Books, Magazines seller, snail/wrapper manufacturer, flower/fruit/vegetable seller, poultry/pigeon/quail keeper.

Organic manure including cattle/goat/sheep and cattle breeders, shrimp/fish / crab/caterpillar farmers, earthworm manure growers, vegetable growers, entrepreneurs - Nursery / Plantation, Needlework, Boutiques, Small / Cottage industries, Handicrafts makers are also eligible for loans from the refinance scheme.

The individuals involved in the preparation of other foods including confectionery and any other potential innovative activities and VDP members trained in conducting income-generating activities will be considered as covered by the loan facility, the BB notification stated.

School banking account holders of 18 years old will be considered for credit for income-generating activities and training. Banks will be able to disburse loans under the scheme for conducting skill-based occupations and businesses.