Monday, 17 January, 2022

SMEF releases Tk 1bn loans for pandemic recovery

Tk 1bn more will be released by December; Entrepreneurs to get up to Tk 5 million each at 4pc interest

  • Staff Correspondent
  • 31 October, 2021 12:00 AM
  • Print news
SMEF releases Tk 1bn loans for pandemic recovery

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SME Foundation released around Tk 1 billion loans for small and medium enterprises hit by the pandemic while more loans are in the process of approval.

SME Foundation chairperson Prof. Dr Md Masudur Rahman informed about it while speaking as the chief guest at an event in Sylhet on Saturday.

The Foundation signed agreements with 19 banks and financial institutions to disburse Tk 2 billion among the SMEs for recovery of the losses.

It hoped disbursement of all the incentive loans would be complete by end of this year.   

The SMEF in collaboration with Bangladesh Bank’s Sylhet office organised the event styled as “Entrepreneurs-Bankers Matchmaking”.

This aims to extend the government's incentive package loans to the SME entrepreneurs.

The Foundation said Tk 420 million loans have already been released for 316 entrepreneurs while Tk another Tk 420 million loans have been approved for release to 230 entrepreneurs.

According to it, more loans of Tk 540 million for 268 entrepreneurs are in the process of approval.

Bangladesh Bank executive director Md Shafiqul Islam attended the event as special guest, with SMEF managing director Md Mofizur Rahman in the chair.

Bangladesh Bank general manager AKM Ehsan and SMEF general manager Farzana Khan were also present.

SME Foundation chairperson Prof. Md Masudur Rahman said the entrepreneurial organisations could play an important role in bridging the gap between bankers and SME entrepreneurs.

“The process of disbursement of loans to small entrepreneurs is more expensive than that of big entrepreneurs. I thank the banks and financial institutions for coming forward with the initiative,” he said.

Md Shafiqul Islam, executive director of Bangladesh Bank, said a hotline could be set up to ensure smooth disbursement of the government incentive loans.  SME Foundation managing director Md Mofizur Rahman said in the case of small entrepreneurs, there was no precedence of non-repayment of loans. He urged the bankers to simplify the rules for lending to SME entrepreneurs and advised the entrepreneurs to prepare the necessary documents to get the easy loans. He hoped the loan disbursement of Tk 2 billion would be complete by end of this year.

In September 2021, the foundation signed agreements with 19 banks and financial institutions to disburse the loans to SMEs.

The interest rate on the loan will be 4 per cent. An entrepreneur will get a loan from a minimum of Tk 100,000 (1 lakh) to a maximum of Tk 5 million (50 lakh). One can get the unsecured loan up to Tk 2.5 million.

Banks and financial institutions to the disburse the loans are: BRAC Bank, Bank Asia, BASIC Bank, The City Bank, Mutual Trust Bank, Dhaka Bank, NRB Commercial Bank, Premier Bank, Social Islami Bank, One Bank, Prime Bank, Karmasangsthan Bank, United Commercial Bank, Eastern Bank, Southeast Bank, Rajshahi Krishi Unnayan Bank, IPDC Finance, IDLC Finance and Lankabangla Finance.

As per the terms of the agreement, these banks and financial institutions are affiliated with about 100 SME clusters, chambers, associations of entrepreneurs across the country.

They also have affiliation with women entrepreneurs and SMEF across the country, SME sub-sectors, trade bodies and groups of SMEs and groups recommended by various governmental NGOs and associations.

Under the first-phase, the loans will be provided to rural and marginal entrepreneurs who have not received any loans yet. The target is to distribute 30 per cent of the total loan to women entrepreneurs. The government has disbursed Tk 1 billion to micro, small and medium (CMSME) entrepreneurs in fiscal year 2020-21.  The Finance Division allocated another Tk 2 billion for the SME Foundation this fiscal year.

Under the incentive package, the entrepreneurs can repay the loans in maximum 24 equal monthly installments on the basis of banker-customer relationship.