Banks told to disburse Tk5,000cr CMSME loans by Nov

Banks have been urged to disburse the entire Tk5,000 crore under Bangladesh Bank’s refinancing scheme for cottage, micro, small and medium enterprises (CMSMEs) by November.

Loan disbursement under the scheme began after agreements were signed with participating banks around September 10. However, only around Tk450 crore had been disbursed during the first two weeks.

Managing directors of 36 banks and five financial institutions attended a meeting with a Bangladesh Bank deputy governor on Thursday. City Bank Managing Director Masrur Arefin disclosed the information to journalists after the meeting.

“The Tk5,000 crore scheme is very important for marginal-level small businesses. Small traders facing working capital shortages to purchase goods for their daily operations will be able to access loans at relatively affordable interest rates under the scheme,” Arefin said.

He said banks had been urged to accelerate disbursement of the remaining funds, with the target of distributing the full Tk5,000 crore by November.
The meeting also discussed Bangladesh Bank’s ‘Udyog’ project for young entrepreneurs, Arefin said.

The project is currently being piloted in several selected districts across different divisions, but has not received the expected response, he said.
“Banks have been instructed to conduct wider publicity about the project at the upazila, union and district levels,” Arefin said.

Under the Udyog project, young entrepreneurs can receive support of up to Tk10 lakh, along with another Tk10 lakh in loans, he said.

The initiative particularly aims to bring entrepreneurs aged 21 or below under its coverage, he added.

Asked about allegations that banks were not cooperating with a Tk60,000 crore package aimed at reopening closed and partially closed industrial units, Arefin said he did not agree with the allegations.

“Banks and Bangladesh Bank are interested in providing fresh financing to factories that are closed, partially closed or operating below capacity. However, we also need to ensure that new non-performing loans are not created after financing is provided,” he said.

Arefin stressed that banks should not disburse funds merely to meet targets.
“Financing must go to meaningful and sustainable projects. Although it is somewhat difficult to find suitable projects at present, banks are making efforts in this regard,” he said.

He added that the financing had been arranged jointly by banks and Bangladesh Bank.

“The main objective is to ensure that the money reaches genuine entrepreneurs and those who actually need it,” he said.