New BB initiative to keep CMSME vibrant

Bangladesh Bank has introduced an electronic system to expedite implementation of the stimulus package for Cottage, Micro, Small and Medium Enterprises (CMSMEs) that are facing financial hardship in coping with the impact of the Covid-19 pandemic.

The central bank's move came against the backdrop of a sluggish trend in disbursement of money from the stimulus package announced by Prime Minister Sheikh Hasina to get the wheels of the virus-hit economy back rolling.          

Earlier, economists and trade body leaders suggested taking some immediate measures, including timely disbursement of funds from incentive packages and tax concessions for revival of the CMSME sector that employs around 35 percent of the total workforce.

The electronic system, generally known as 'dashboard' will help the central bank strengthen monitoring and supervision of credit disbursement and recovery in this priority sector.   

It is a digital system . . . it will help intensify monitoring and supervision on disbursement of stimulus package closely, said BB's chief spokesperson Sirajul Islam.  

Under the automated system, both the BB and the scheduled banks are now able to supervise bank-wise different data including sanction as well disbursement of such loans in real time basis instead of weekly one, he said.

According to the BB, the banks and non-banking financial institutions (NBFIs) disbursed Tk 119.86 billion of the stimulus package to the smaller firms, which is nearly 60 percent of the total allocation of Tk 200 billion.

Loans amounting to around Tk 132.43 billion were approved for 83,319 Covid-affected CMSMEs across the country as on February 11, the BB's data showed.

The central bank has already ordered the banks to disburse all stimulus packages by March 31 to help revive the economy.

The order was given at a virtual meeting between the bankers and the central bank Governor on January 27.

Earlier, economists and trade body leaders suggested taking some measures, including timely disbursement of funds from incentive packages and tax concession for revival of the CMSM sector hit hard by Covid-19.

They also suggested announcing separate stimulus packages for women entrepreneurs and cottage, micro and small enterprises so they can cope with the impact of the Covid-19 pandemic.   

CMSMEs should be given special attention for stimulus packages. As the proper and quick disbursement of stimulus packages is a challenge, the government must take steps to reach the money timely to CMSMEs through banks and microfinance institutions, said economist and former governor of Bangladesh Bank Dr Atiur Rahman.

He said banks are not so competent, and they also have a lack of experience in disbursement and recovery of loans. So, if cautionary measures are not taken, funds from incentive packages would not be reached to the actual enterprises hit hard by the Covid-19, he added.

Mentioning the Bangladesh Bank's Tk 10,000 crore refinancing scheme for the CMSME sector, Atiur said attention needs to be given on changing policy for the sector, with cottage, micro and small enterprise  segregated from CMSMEs because the CME enterprises with small capital need more support from the refinancing scheme. 

To ensure quick and proper disbursement of loans for CMSMEs, Dr Atiur Rahman suggested using digital financial platforms to reach loans to needy CMSMEs.  

Earlier, Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman alleged that though the government announced incentive packages for the CMSME sector, banks are not cooperating with the sector properly in giving the loans.

He suggested involving microfinance institutions in expediting the loan disbursement process.