Bangladesh Bank (BB) has for the first time fixed a target for all banks and financial institutions of distributing Tk 23,995 crore in small and medium enterprise (SME) loans for 2010.
The target and policy for the SME loan distribution were announced yesterday at a meeting of all chief executive officers of the banks and financial institutions with BB Governor Dr Atiur Rahman in the chair. The meeting was held at the BB conference room.
The banks will give up to Tk 25 lakh collateral-free loan to small enterprises and women entrepreneurs. In these cases, the banks can consider personal guarantee including products and machinery of the enterprises as collateral.
The banks will divide the whole country into different zones and a bank would choose one zone for distributing its loans.
The BB governor told journalists that the banks would distribute the loans on area basis. A three-tier monitoring system will be introduced to oversee whether the loans are distributed properly.
Of the Tk 23,995 crore loans, state-owned commercial banks will disburse Tk 3,897 crore, specialised banks Tk 600 crore, private commercial banks Tk 17,478 crore, foreign banks Tk 707 crore and non-bank financial institutions (NBFIs) Tk 1,313 crore.
The central bank has already identified prospective small initiatives in 64 districts for giving SME loans to the entrepreneurs, and made a list of 131 enterprises including bakery, handicrafts and cold storage. The list was presented at the meeting.
The BB directed the banks to give priority to small enterprises and women entrepreneurs. The loan limit for small entrepreneurs would be Tk 50,000 to Tk 50 lakh.
For the medium enterprises no figure has been mentioned. The banks will decide the amount for such entrepreneurs on the basis of need.
Every bank has been directed to introduce a dedicated desk for women entrepreneurs, appoint necessary manpower and provide them with training for financing the SME sector.
The BB policy said the banks would take collateral on the basis of their relation with the customers in case of giving over Tk 25 lakh loans. On the interest rate, the policy said the banks would decide on the rate. However, the banks have been asked to ensure that the rate remains tolerable and conforms the operating cost of the banks.
After the meeting, Association of Bankers, Bangladesh President K Mahmood Sattar said: “We will try to keep the interest rate as low as possible. We will soon decide on which bank will work in which area.”
Bangladesh Bank head office and its regional offices will monitor whether the SME loans are distributed and recovered properly. The bank concerned and its regional office will also launch a similar monitoring system.
Source: http://www.thedailystar.net
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