Steps/ Measures taken by Bangladesh Bank for SME Development
Posted by Ripon Abu Hasnat on Sunday, June 22, 2014 | 0 comments
Bangladesh Bank has already introduced several schemes and
programs to flourish and expand SME Enterprises. Refinance scheme funded by
Bangladesh Bank, IDA and ADB has been facilitated for the development of SME
Sector. Besides, to ensure institutional financial facilities under easy
conditions Bangladesh Bank has taken diverse steps; like opening of ‘Dedicated Desk’ for SME and ‘SME Service
Centre’ in the banks and special facilities for
the women entrepreneurs. But reality is that expected outcome has not been
achieved so far in this sector.
In the back drop of recent global recession and changed
circumstances, it has become essential to include all segments of people in the
growth process through facilitating credit to the sectors where less attention
has been given due to present market mechanism, specially, in agriculture and
SME sector. Reasonably, a new department namely ‘SME and Special Programmes
Department’ has been
established in Bangladesh Bank recently which will be solely responsible for
policy formulation, facilitating fund, monitoring and development of
entrepreneurship in the SME sector.
The guidelines formulated by the newly created department
for compliance of the banks and financial institutions for the development of
SME sector are enumerated below:
Target for SME loan disbursement
For the first time in Bangladesh, an
indicative target for SME loan disbursement has been set for 2010 by the banks
and financial institutions considering SME development as one of the most
important development agenda of the country. According to the target, SME loan
shall be disbursed to the small, medium and women entrepreneurs.
Following the 'Area Approach Method'
Following the 'Area Approach Method'
banks/financial institutions will try to attain their indicative targets
separately by dividing it as branch wise, region wise & sector wise.
Separate business strategy in financing SME
Each bank/financial institution shall
follow a separate business strategy in financing SME loan with least
formalities in executing documentation to ensure easy and speedy loan sanction
and disbursement process.
Priority given to small entrepreneurs
Priority shall be given to small
entrepreneurs.
Small entrepreneurs credit limit
For small entrepreneurs credit limit
will be ranged from Tk. 50,000 (Fifty thousand) to Tk. 50,00,000 (Fifty lac).
SME credit disbursement to women entrepreneurs
For more participation of women
entrepreneurs in industrial development of the country and for conducting
business activities by women entrepreneurs in large number, priority shall have
to be given to potential women entrepreneurs in respect of SME credit
disbursement.
Highest priority in receiving loan application from women
entrepreneurs
Banks & Financial Institutions
shall put highest priority in receiving loan application from small and medium
women entrepreneurs and settle the loan disbursement process within very reasonable
time from the date of acceptance of the application.
Separate ‘Women Entrepreneurs’ Dedicated Desk’
Each bank and financial institution
shall establish a separate ‘Women Entrepreneurs’ Dedicated Desk’ with necessary and suitable manpower,
provide them training on SME financing and suiltably appoint a lady officer as
chief of dedicated desk. Branch wise list of ‘Women Entrepreneurs’ Dedicated Desk ‘should be sent to SME and Special
Programs Department of Bangladesh Bank within two months from the date of
declaration of this policy and programme.
Loan to women entrepreneurs against personal guarantee
Banks and financial institutions may
sanction up to Tk. 25,00,000 to women entrepreneurs against personal guarantee.
In that case, group security/social security may be considered.
Considered as yardstick for new branches
The success in SME loan disbursement
will be considered as yardstick for further approval of new branches of the
concerned bank. License for New Branches will be issued for financing the priority
sectors like SME and agriculture from 2010 in the name of ‘SME/Agriculture
Branch’ instead of ‘SME Service
Centre; in order to involve banks in financing priority sector like SME and
Agriculture’.
Fixing the interest rate
Each bank/financial institution shall
fix the interest rate on SME loan sector/sub-sector wise. However,
bank/financial institution will inform Bangladesh Bank sector/sub-sector wise
rate of interest immediately and ensure disbursement of refinanced fund to the
clients (women entrepreneurs) at Bank rate +5% interests.
Training programs
Training
programs shall be arranged for the entrepreneurs.
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