SMEs happy with single-digit interest rate for loans

Small and medium enterprises (SMEs) have welcomed the government decision of implementing of single-digit interest rate for all types of bank loans from April this year.

Bank loans at low interest rate are very important for small enterprises. As getting SME loans from banks is a matter of hassle, many entrepreneurs have never even applied for loans, they said.

Entrepreneurs, who got SME loans at 9 percent interest rate previously and had to count interest at 16 percent or more during payment of installments, shared their experiences at the ongoing 8th National SME Product Fair 2020.  

That is why most SMEs tried to manage loans from family members or relatives instead of applying to banks, they said.

They believe that issues related to the loans are going to resolve by default once the single-digit interest rate for all types of loans is implemented.

Photo: Mumit M/TBS

Farzana Ripa, founder of Signet, said all entrepreneurs do not have a strong family support or trustworthy siblings to provide loans. "They have to go through trouble to manage the initial fund."

She said, "The requirements for SME loans are very much complicated at present. But I believe these issues are going to be resolved by default once the single-digit interest rate for all types of loans is implemented.

"Some of my friends took SME loans with single digit interest rate before. But they saw the interest rate stands at 16 percent during the payment of installment," said Farzana.

"Considering these things and hassles they had to take for a minimal amount of loan, I never tried for SME loans from banks," she added.

Photo: Mumit M/TBS

"Usually the initial investment act as key barrier for new entrepreneurs. If single digit interest rate is implemented properly, then the barrier will be gone. We can work tension-free in setting up our businesses," said another small entrepreneur, Tanha Akter Mukta.

Industries Minister Nurul Majid Mahmud Humayun on Monday told reporters that the agenda behind the fair is to promote local SME products in both domestic and international markets. But exhibitors said they had not got any foreign buyer at the fair so far.

Nirvana's owner Amin Islam Bipa who has attended the fair for several years, said, "I do not remember getting any big buyers from abroad. In my life time, only two foreigners came to my stall in the past. Our business mostly relies on local and known buyers only."

File Photo: Mumit M/TBS

On a visit to the fair, fashion designers were seen dominating this year's event. As many as 156 of 309 stalls at the fair are showcasing fashion products.

The nine-day-long fair kicked off at the Bangabandhu International Conference Centre in the city on Wednesday.

Some 300 entrepreneurs are participating in the fair this year.