BB instructs banks to increase credit amount to CMSMEs
The decision has been made as banks could achieve only 21% of the target to disburse the stimulus package allocated for Covid-hit small businesses
The Bangladesh Bank has instructed to increase the mortgage free credit amount to the small entrepreneurs affected during covid pandemic from the second stimulus package of Tk20,000 crore in the 2021-22 fiscal year aiming to bring more beneficiaries under the scheme, said a circular issued by the central bank on Thursday.
The decision has been made as banks could achieve only 21% of the target to disburse the stimulus package allocated for Covid-hit small businesses.
Earlier, a small entrepreneur under cottage, micro, small and medium enterprises (CMSMEs) was entitled to receive from a minimum of Tk2 lakh to a maximum Tk50 lakh from the stimulus package.
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Now the amount would range between minimum Tk25000 to a maximum Tk1 crore.
A latest report of the central bank showed that Bangladesh Bank set a target to disburse Tk 20,000 among the covid-hit small entrepreneurs during the current fiscal year (2021-22). But the banks could achieve much less of the target during the first five months of the current fiscal.
The disbursed amount was Tk4001 crore from July till 21 December period which is only 21% of the target. Only three banks and one non-bank financial institution could achieve the target.
Of the mortgage free loans, at least 10% of the credit guarantee scheme should be disbursed among women entrepreneurs.
In April last year, the first stimulus package of Tk20,000 crore was announced for the CMSME entrepreneurs of which 77% target was achieved after the end of the fiscal year.
BB will be the guarantor of this mortgage free loan for the small entrepreneurs. The concerned banks would receive 80% of the default loans from BB.
