No more time extension on CMSME stimulus package

The deadline for implementing the Tk20,000 crore stimulus package for the cottage, micro, small and medium enterprise (CMSME) sector will not be extended. The time for its implementation will expire on 31 March.

According to sources at the Bangladesh Bank, till 11 March, banks and financial institutions have disbursed Tk12,802 crore from the package – which is 64% of the target.

However, Tk14,360 crore has been sanctioned for distribution till March 31, which is 72% of the target.

Since the announcement of the package in April last year, the implementation deadline has been extended several times.

Since the tenure of the package is three years, the lending will start anew in April this year. In this case, those who received loans for the first time will not get loans again at the subsidised interest rate of 4%.

According to the package policy, a borrower will get this opportunity only once. Although the interest rate on the loan is 9%, the government will bear 5% interest as a subsidy. The remaining 4% has to be paid by borrowers.

Those who once received a loan at the subsidised interest rate will have to pay full interest of 9% if they want a new loan from April.

However, new borrowers will get the opportunity to take loans at 4% interest.

According to central bank sources, Sonali Bank is leading among the state-owned lenders in implementing the package till 11 March. Its implementation has been better as the target of the financial institution has been reduced.

Janata Bank is in the worst position among the government banks in implementing the package. The implementation rate of the institution is only 12%, with disbursing only Tk103 crore against the target of Tk871 crore.

Among private banks, Brac, Al-Arafah, Dutch-Bangla, Eastern, One, Prime, Premier, and Uttara Bank have been able to disburse more than 80-90% of their targets.

However, 15 public and private banks – including Janata Bank – have not yet implemented even 50% of the target.

Asked about the implementation of the banks, Serajul Islam, executive director, and spokesperson of the central bank, told The Business Standard that the lenders were given directions to implement the CMSME sector package. According to him, the banks are trying hard to meet their targets.

The central bank will have a soft stance on banks that have succeeded in following the guidelines. But the reasons why some banks have lagged behind their targets will be investigated. If the banks are behind for logical reasons, the issues will be solved, he added.