Bangladesh Bank creates $240m fund for SME sector
BSS
Bangladesh Bank (BB) has created a US $240 million refinancing fund for providing loans to small and medium enterprises (SMEs) at low interest, reports BSS.
Asian Development Bank (ADB) will contribute $200 million, while the government will provide the rest $40 million to the fund, said a BB senior official yesterday.
Under the refinance scheme, banks and Financial Institutions (FIs) can provide maximum 90 per cent of the total project cost and borrower will have to bear the rest of the cost, said a BB recent circular.
The borrowers will get maximum Tk 3 crore in loans, the circular added.
The BB circular also said the highest tenure of a mid-term loan will be three years and that for a long-term loan will be five years. The
refinancing scheme will be applicable for the projects outside Dhaka and Chittagong metropolitan areas.
The central bank will take four percent interest from the banks and FIs. But BB has directed the banks to give loans to the male borrowers on the basis of market rate of interest. From the fund, 15 per cent will be reserved for women entrepreneurs and the highest interest rate for them will be 10 per cent.
Of the total fund, two thirds will be fixed for cottage, micro and small industries and the rest of the amount will be for medium industries.
For getting the refinance facility for giving loans under the SME category, the banks will have to fulfill some criteria.
