The central bank has launched a Tk500crore re-financing scheme this week to help assuage the low-income people from the impact of the Covid-19 pandemic.
A group of people including small and micro-entrepreneurs and professionals, blacksmiths, potters, fishermen, landless farmers, hawkers, shopkeepers and rickshaw pullers will be able to take loan from the special fund. They will be able to take a loan of up to Tk5 lakh without collateral. The maximum interest rate on this loan will be seven percent.
The Bangladesh Bank (BB), in a press release, said Tk10, Tk50, and Tk100 account-holders are entitled to get loan from the special fund on the marginal or landless farmers, low-income groups, school banking account-holders and small businesses.
The main object of the fund is to buttress the economic activities of these people, affected by the second wave of the virus outbreak.
The name of the new fund is 'Refinancing Scheme for Marginal and Landless Farmers, Low-Income Professionals, School Banking Account holders and Small Businesses with 10, 50 and 100 Taka Accounts.
This scheme of Tk. 500crore for a period of five years has been formulated from the own funds of Bangladesh Bank, which is rotating within the stipulated period. However, the term can be extended if the central bank thinks it necessary.
Under the additional financial program, all the customers availing of loans under this scheme will have an existing account of Tk 10, 50 and 100. On the other hand, to avail of a loan facility under this scheme, new customers must open bank accounts of Tk10, 50 and 100.
According to the Bangladesh Bank, neighbourhood, mahalla, village-based micro-entrepreneurs and professionals (such as tanners, goldsmiths, barbers, blacksmiths, potters, fishermen, tailors, hawkers and peddlers, rickshaw-pullers and van drivers, electricians, electronics repairmen, carpenters, masons, painters, grill-makers, plumbers, pickle / cake makers, small weavers, veterinarian, etc.) Agents, Information Service Providers, Internet Service Providers, Floating Food Stores, Tea Dealers, Books and Magazine Dealers, Thonga and Wrap Manufacturers, Flower, Fruit, Vegetable Dealers, Poultry-Pigeon-Quail Keepers, Cows-Goat-sheep, cattle farmers, shrimps, fishes, crabs, caterpillars, any organic fertilizer producer including earthworm manure, vegetable growers, entrepreneur-nursery / tree planting, needle industry, block-batik, small / cottage industries, handicrafts, confectionery Individuals involved in food preparation and any other potential innovative activities and Village Defense Parties (VDP) members trained in various income-generating activities) will be considered as eligible for the loan facility.
Alongside, affected by any disaster like river erosion, tidal wave, cyclone, flood, drought, monga, fire, earthquake, building collapse, epidemic like Covid-19 marginal and landless farmers, small traders, low-income people living in char and haor areas will get the loan on a priority basis.
Individuals with special needs and women entrepreneurs will also get this loan for income-generating activity.
The central bank also asked the chief executive officers and managing directors of all scheduled banks for taking necessary measures to provide loans to such people.
Under the scheme, the scheduled banks are allowed to disburse collateral-free loans of a maximum Tk0.5 million to a client. In terms of group funding, the regulator set a loan limit of a maximum of Tk2.0 million for a group having two to five members.
The rate of interest under the scheme will be 1.0 percent, while the beneficiaries will get loans at the rate of maximum 7.0 per cent from the banks.
No security deposit can be taken in case of loan disbursement under this scheme. However, the personal guarantee of not more than two persons including the borrower can be taken against the loan of each borrower.
The grace period will be a maximum of six months in both bank and customer level. The maximum loan period will be three years without a grace period.
Bangladesh Bank will collect the principal from the banks in quarterly installments excluding grace period with interest / profit / service charge and the banks will collect the principal including interest and profit from the customer in monthly, quarterly and half-yearly (if applicable) installments excluding the grace period.