SME Foundation, Prime Bank sign deal to expand CMSME financing

SME Foundation and Prime Bank have signed a refinancing agreement to expand credit access for cottage, micro, small, and medium enterprises (CMSMEs) through the government's Tk300 crore revolving fund and Credit Wholesaling guidelines.

The agreement was signed in Dhaka and attended by Khandaker Abdul Muktadir, Minister for Industries, Commerce, Textiles, and Jute, who underscored the government's commitment to fostering a supportive environment for small entrepreneurs.

Under this agreement, Prime Bank will offer affordable loans to qualified entrepreneurs at a maximum interest rate of 8 per cent per year. Loan amounts range from Tk1 lakh to Tk25 lakh, depending on the enterprise's size.

To lessen the strain on small business owners, the programme offers up to 4 years of repayment, including a 6-month grace period, so businesses can generate returns before starting monthly payments.

A primary goal of the initiative is to advance financial inclusion and social equity. The agreement stipulates that a substantial portion of funds supports women entrepreneurs and businesses within designated industrial clusters.

The programme emphasises support for young ICT innovators, manufacturers of import substitutes, and entrepreneurs in climate-vulnerable or underserved areas. By waiving collateral for loans up to Tk10 lakh, the partnership ensures entrepreneurs lacking assets can secure the capital needed for growth.

SME Foundation and Prime Bank leaders voiced confidence in the fund's ability to benefit the national economy. Beyond lending, the programme encourages sustainable industrialisation by promoting green technology and supporting returning migrants in joining the workforce.

M Nazeem A Choudhry, Additional Managing Director of Prime Bank, and Anwar Hossain Chowdhury, Managing Director of SME Foundation, asserted that this collaboration will create jobs and increase the resilience of Bangladesh's CMSME sector.