Tk300cr in SME loans recovered with 99% success rate
From micro-businesses to manufacturing ventures, small entrepreneurs are proving their reliability by repaying pandemic stimulus loans on time
During the Covid-19 pandemic, the government introduced a low-interest stimulus package for small and medium-sized entrepreneurs. Under this initiative, the SME Foundation received an allocation of Tk300 crore.
Dedicated to the development of small and medium enterprises, the SME Foundation disbursed the loans through 18 banks and 5 non-bank financial institutions. Loans up to Tk10 lakh require no collateral.
These loans carried a four-year term, including a six-month grace period. Once repaid on time, the funds were recycled to support new entrepreneurs in a revolving manner.
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Speaking to The Business Standard, SME Foundation's Managing Director Anwar Hossain Chowdhury said, "The recovery rate of the Tk300 crore stimulus loan has been excellent. Ninety-nine per cent of the disbursed loans have been recovered on time."
He attributed this high recovery rate to proper monitoring of loan disbursement and repayment processes.
Chowdhury further noted that entrepreneurs have significantly benefited from the loans, which were offered at just 6% interest, 4% subsidised by the government and 2% by the banks. "The loans were distributed among small entrepreneurs at the grassroots level. After the loan term ends, the government fund is recycled to extend new loans again."
According to officials at the foundation, not only the stimulus package loans but also those disbursed under the Credit Wholesale Fund and Revolving Fund have shown strong recovery performance.
Data from the SME Foundation reveals that a total of Tk982.33 crore in loans has been disbursed under four packages. This includes Tk122 crore under the Credit Wholesale Fund, Tk304 crore from the Stimulus Fund, Tk298 crore under Revolving Fund-1, and Tk256 crore under Revolving Fund-2. A total of 10,488 entrepreneurs have received these loans.
On 11 June last year, the SME Foundation signed agreements with 23 banks and financial institutions to disburse Tk450 crore in loans to small and medium entrepreneurs. The target loan range was set between Tk1 lakh and Tk50 lakh.
It was planned that 30% of the total loans would be distributed among women entrepreneurs and 10% among those within SME clusters. For women entrepreneurs, 50% of the loans were to be directed to production and service sectors, and the remaining 50% to value chains and other sectors. For male entrepreneurs, 50% of the loans were designated for production, 25% for service, and 25% for value chain and other sectors.
From the Stimulus Fund alone, Tk304 crore has been distributed to 3,132 entrepreneurs. Of these recipients, 76.47% were male and 23.53% female. In terms of loan volume, 73.80% went to male entrepreneurs and 26.20% to females.
According to the loan disbursement figures for the 2024–25 fiscal year, as of the first week of June, the Foundation has disbursed Tk271 crore in loans to 2,309 entrepreneurs. Of this amount, 79.68% has been distributed to male entrepreneurs and 20.32% to female entrepreneurs.
By sector, manufacturing received the largest share, 55.12% or Tk149.64 crore. Trade accounted for 17% or Tk47 crore, and the service sector received 27.56% or Tk74.82 crore.
Micro-entrepreneurs received 29.56% or Tk80 crore, small entrepreneurs 44.34%, and medium entrepreneurs 26.10% of the total loans.
