Most NGOs, govt orgs fail to distribute incentives despite cry for SME loans
After distributing Tk100 crore, the SME Foundation has received another Tk200 crore
Highlights:
- Tk293.37 crore out of Tk570 crore incentives remained undistributed in FY21
- Only SME Foundation, BSCIC fully disbursed incentives
- Prolonged office closures in lockdown blamed for not distributing funds
Most NGOs, government and semi-government institutions, who are responsible for distributing loans, have failed to disburse incentive funds announced by the government for Cottage, micro, small and medium enterprises (CMSMEs) although there is a huge cry for SME loans.
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Entrepreneurs in these sectors are in high demand for loans in the transition from the dire straits due to Covid-19 pandemic.
Some Tk293.37 crore out of Tk570 crore of incentive funds released by the finance ministry remained undistributed in the 2020-2021 financial year despite the huge demand for loans.
Of the eight institutions, only SME Foundation and the Bangladesh Small and Cottage Industries Corporation (BSCIC) have completely disbursed the incentive funds allocated for 2020-2021 fiscal year.
On 17 January this year, the government approved a new package amounting to Tk1500 crore for small traders, entrepreneurs and farmers.
The institutions, who are responsible for disbursing loans, include the SME Foundation, the Social Development Foundation, the Palli Daridro Bimochon Foundation (PDBF), the Bangladesh Rural Development Board, The Bangladesh Small and Cottage Industries Corporation (BSCIC), and the Small Farmers Development Foundation, Joyeeta Foundation and the Bangladesh NGO Foundation.
Six institutions of those failed to disburse the allocated incentive funds among the CMSMEs. Of them, three institutions could not distribute a single taka of incentive and three were able to distribute partially.
Sources said the finance division of the finance ministry released Tk570 crore in the 2020-2021 financial year. However, the responsible organisations distributed only Tk276.63 crore at the end of the financial year.
Regarding the inability to distribute incentive funds, that organisations blamed prolonged office closures in lockdown, formulation of policies for distribution of actual priorities and screening of victims for the delay in loan disbursement.
Joyeeta Foundation and NGO Foundation has received an allocation of Tk10 crore from the finance ministry for distribution among businesses for the fiscal year 2020-2021. But they could not distribute a single penny in that financial year.
Under this package, the Palli Daridro Bimochon Foundation (PDBF) receives Tk100 crore for the fiscal year 2020-2021. However, they also failed to distribute any incentive money. The Small Farmer Development Foundation (SFDF) received Tk50 crore but was able to distribute Tk25 crore.
The Bangladesh Rural Development Board has been able to disburse only Tk60 crore even though it has received Tk150 crore funds. The Social Development Foundation received Tk100 crore but was able to distribute Tk41.63 crore.
Afroja Khan, Managing Director of Joyeeta Foundation said "We have distributed five crore out of Tk10 crore, the remaining Tk5 crore will be distributed next week. Then next week we will apply to the government's finance department for the remaining Tk40 crore."
"We have delayed a little for properly identifying the most affected Jayeeta entrepreneurs, verifying the applications of the victims and disbursing our funds due to bank complications, " she further said.
Sahidul Haque Khan, director (In-Charge), field operation of Palli Daridro Bimochon Foundation, claimed that they have distributed Tk36 crore. A total of Tk50 crore will be distributed within this month. The remaining Tk50 crore will be distributed within the next month.
Zakir Hossain, managing director of the Small Farmers Development Foundation, claimed that they have distributed Tk40 crore and will distribute Tk10 crore in the next one week. Then an application will be sent to the finance division to get another Tk50 crore.
SME Foundation receives Tk200 cr more
After successful disbursement of Tk100 crore loan in FY 2020-2021, the SME Foundation has received another Tk200 crore discount for the current financial year, Officials of the SME Foundation said on Monday.
They will complete the disbursement of this loan by next December.
Like the previous Tk 100 crore, the loan will be disbursed to small and medium entrepreneurs across the country through the banks.
The SME Foundation will inform concerned businesses of any policy changes.
With the allocation of Tk100 crore for the last financial year, they have disbursed these loans through 11 banks and financial institutions. This time too they will disburse the loan by signing an agreement with the banks.
Some 1,044 entrepreneurs got the loan through SME Foundation.
Mafizur Rahman, managing director of SME Foundation said, "We have received a rebate of Tk200 crore, which we will start distributing very soon. "
He said the categories and policies of the previous incentives will remain almost unchanged. A little change in one or two matters can happen.
