Tenure of CMSME working capital loans must be one year: Cenbank
The strict order came following a Bangladesh Bank analysis on the disbursement situation of the loans under Tk25,000cr refinancing scheme
The tenure of loans to cottage, micro, small and medium entrepreneurs, also known as CMSMEs, as working capital under the Tk25,000 crore refinancing scheme must be one year, the Bangladesh Bank said yesterday.
The strict order came following a central bank analysis on the privileged loan disbursement situation.
"The demand for working capital loans under the refinancing scheme has increased sharply among the CMSMEs. However, it is observed that some banks and financial institutions are giving the loans for more than 12 months, which is a violation of the central bank policies," the Bangladesh Bank said in a circular.
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"The funds given to lenders under the scheme will be realised in a single payment at the end of the tenure," the circular that came into effect immediately said.
"However, the loans can be renewed, if necessary, with applications to the Bangladesh Bank," it reads.
The central bank formed the Tk25,000-crore refinancing scheme in July last year to support small-scale entrepreneurs for the next three years. Banks and financial institutions are getting funds under the scheme at 2% interest and lend CMSMEs at up to 7% rate.
