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Central bank announces BDT 25,000 Cr refinancing scheme for CMSME

Central bank announces BDT 25,000 Cr refinancing scheme for CMSME

The central bank has announced the formation of a refinance scheme of  BDT 25,000 crore for the cottage, micro, small, and medium enterprises (CMSME) sector from the bank’s own funds.

According to a circular of the Bangladesh Bank’s SME and Special Programmes Department, the three-year fund can be extended if necessary. Under the scheme, banks and financial institutions can charge a maximum of 7% interest from customers.

Besides, they will get refinancing at a 2% interest from the Bangladesh Bank, which will collect the refinancing amount along with interest from banks and financial institutions quarterly.

Banks and financial institutions have to distribute a minimum of 75% of the total loan disbursed under the scheme among cottage, micro and small entrepreneurs and a maximum of 25% can be distributed among medium entrepreneurs. Besides, at least 70% of loans can be given to the manufacturing and services sector and a maximum of 30% to the business sector. Defaulting borrowers will not get loans under this scheme.

Agriculture/food processing and agricultural machinery manufacturing industries, RMG, knitwear, design and decoration, ICT, leather and leather goods industries, light engineering and jute and jute industries will get high priority in this loan.

Also, plastics and other synthetics industry, tourism industry, home textiles, renewable energy (solar power), automobile manufacturing and repairing industry, handlooms, handicrafts, energy saving appliances (led, CFL bulbs manufacturing)/electronic appliances, construction industry/electronic material development industry, jewellery industry, toy industry, cosmetics and toiletries industry, agar industry, furniture industry and mobile/computer/television servicing will be preferred.

Apart from this, women entrepreneurs, entrepreneurs with special needs and those affected by any disaster will also get loans under this scheme on a priority basis.

In the case of loans given under this scheme, the grace period at the customer level will be a maximum of six months. Loan tenure including grace period shall not exceed five years. Banks and financial institutions have to enter into a participation agreement with the Bangladesh Bank to provide loans under this scheme.

Government banks can give loans under this scheme. However, to give loans to private and foreign banks and financial institutions, their classified loans must be less than 10% and they must have a minimum of three years of business experience.