Tk10 account holders to get up to Tk5 lakh low-interest loans

The Bangladesh Bank has set up a fund of Tk500 crore for Tk10 accounts holders to bring the marginalised people, who have lost the source of their income in the Covid-19 pandemic, under financial services.

In a circular on Sunday, the Financial Inclusion Department of the central bank also said banks will receive loans from the Bangladesh Bank at 1% annual interest and provide the loans at a maximum of 7% interest at the customer level.

Banks can lend up to a maximum of Tk5 lakh to a single borrower under the facility.

But, a group consisting of 2-5 members can be provided with a maximum loan of Tk4 lakh per member, and a maximum loan of Tk20 lakh in total.

All the members of the group will be individually and jointly responsible to the lender for repaying the group loan.

Banks will be able to disburse loans from their branches, sub-branches, and agent banking branches under this scheme.

Small and micro-entrepreneurs and professionals in rural areas such as goldsmiths, potters, fishermen, tailors, hawkers, peddlers, rickshaw pullers, van drivers, electricians, carpenters, masons, painters, and plumbers will come under the loan facility.

According to the circular, just Tk10/50/100 account holders will avail of loan facility under the scheme. New customers will have to open an account for the same amount if they want to avail of the loan facility. No defaulters will get a loan under this scheme.

Under this scheme, borrowers will not need to provide mortgages against their loans.

The grace period will be a maximum of six months at both bank and customer levels. At the end of the grace period, the loan term will be a maximum of three years.

The Bangladesh Bank will collect interest and principal from banks in three monthly instalments, and lenders will collect the loan money from customers in the same manner.

Banks must collect the credit information bureau (CIB) report to ensure that the loan is not disbursed in favour of defaulting borrowers.