Saturday, 27 November, 2021

Collateral-free loans not reaching target group

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

Collateral-free stimulus loans are not reaching small businesses and vulnerable people in informal sector who lost jobs during the pandemic, said speakers at a discussion.

They said the conditions set for collateral-free loans by Bangladesh Bank for Micro, Small and Medium Enterprises (MSMEs) and informal sectors are not fit for most people.

According to them, most of the target people will not be able to meet these “tough conditions”.

They were speaking at a virtual dialogue styled as “Enhancing opportunities for in-country returnee migrants and MSMEs: A case of southeast Bangladesh’.

Business Initiative Leading Development (BUILD) organized the event on Wednesday.

Planning Commission secretary (industry and energy division) Sharifa Khan joined in the discussion as the chief guest.

She said new employment opportunities came as a major factor in domestic migration in Bangladesh.

“A project of Tk 4.27 billion for reintegration of the returnee migrants has been taken by the government to provide skills-based training and financial supports to the returnee migrants in FY2020-21,” she said.

According to a presentation in the event referring to a survey that the unemployment rate rose to 5.3 percent in FY2020-21 due to the COVID-19 pandemic.

Around 36 million people in informal sector lost their jobs due to the pandemic, both in urban and rural areas, the survey said.

Among them, in Rajshahi and northern region of Bangladesh, 67 percent people of informal sector lost their jobs or leave professions in the aftermath of the pandemic.

Mongla Port Municipality maypr Sheikh Abdur Rahman said the capacity building programme is required for the returnee migrants to ensure better utilization of the finance.

He said the government has rigorous safety net programmes for the rural and marginal low-income people but strong monitoring for proper utilization of the funds is necessary.

BB general manager (SMESPD) Md. Jaker Hossain said Tk153.86 billion has been disbursed from the Tk200 billion stimulus package so far.

An amount Tk7.59 billion has been disbursed to the women entrepreneurs only from the fund.  He said Small Scale Employment Creation Project with Asian Development Bank will be launched soon.

He said the project targets the marginal, rural, unemployed youth and migrating people to provide immediate support for social protection and job protection.

Jaker Hossain also mentioned that 50 percent of special CSR initiatives of banks will be provided to the recipients in Rajshahi and Khulna regions for helping the vulnerable people.

He said through a personal guarantee under the credit guarantee scheme (CGS) collateral-free loan up to Tk 2.5 million would be distributed among the MSMEs.

BUILD additional research director Tahmid Zami made the keynote presentation while BUILD CEO Ferdaus Ara Begum moderated the discussion.

The event was also attended, among others, by Bangladesh Frozen Food Exporters’ Association vice president S. Humayun Kabir, ASA joint director Khairul Bashar, RSC manager of BRAC Migration Programme in Khulna Rubel Pervez, Private Sector Engagement Manager of Winrock International Ashraful Alam.