‘Bank-client relationship is not only criteria for stimulus package loan’

Published : 23 Sep 2021 09:04 PM

Bank-client relationship is not the only criteria for the stimulus package, rather the loan can be given based on books of accounts as per the circular, observed Abu Farah Md. Nasser, Deputy Governor, Bangladesh Bank. 

He was speaking at the 9th Financial Sector Development Working Committee (FSDWC) Meeting organized virtually by Business Initiative Leading Development (BUILD) on Wednesday.

Abu Farah Md. Nasser, Deputy Governor, Bangladesh Bank (BB), and N K A Mobin, Acting President of Dhaka Chamber of Commerce and Industry (DCCI) co-chaired the meeting. 

The Deputy Governor also observed that currently banks like Brac Bank are improving the modalities of SME banking. CGS has been implemented for the collateral-free loan. In each division of the country, collateral-free loan lending has been prioritized. 10% collateral-free loan has been directed to provide to the women entrepreneurs. 8% of the total loan has to be gone to the women entrepreneurs at 5% interest. 1% incentive has been announced for both women entrepreneurs and banks for recognizing good borrowers. 

Abu Farah Md. Nasser informed the meeting that the Ministry of Industries has already been requested to bring alternatives for trade licenses for the cottage, micro, and small enterprises so that the trade license issue in lending can be resolved. 

He informed that Bangladesh Bank has introduced a new scheme of BDT 500 crore collateral-free loan through agent banking, MFS, and bank sub-branch to provide finance to the rural and ultra-poor individuals and businesses. 

Earlier BUILD CEO Ferdaus Ara Begum welcomed the participants and highlighted the implementation status of the last 8th FSDWC Meeting and praised Bangladesh Bank (BB) for taking initiatives for supporting implementation of 15 out of the 20 recommendations proposed by BUILD in the earlier meeting, such as: fortnightly monitoring, increase in stimulus package volume, separate arrangements for cottage and micro traders, separate allocation for women, extension of the loan repayment period, collateral-free loan, credit guarantee scheme and expansion of agent banking, and considering alternatives for trade license for E-commerce. 

N K A MobinFCA,FCS, Acting  President, Dhaka Chamber of Commerce and Industry (DCCI) said that addressing the CMSME definition would help address the challenges of CMSME financing. All the organisations related to CMSME development such as SME Foundation, BSCIC, PKSB, PKSF, etc. can be brought under a single umbrella. 

Md. Kamran Hasnain, Research Associate, BUILD delivered a presentation on Redesigning COVID Stimulus Linking to Employment, Consumption & Investment for Next Round Support. 

He shared insights fromm the preliminary findings of the BUILD-UNIDO survey conducted in March-July, 2021. 

Dr. Nadia Binte Amin, Director of FBCCI added that the women entrepreneurs (WEs) should be considered with utmost care while disbursing FSPs.