The ministry took the initiative considering the sufferings of the micro, small and cottage industries
Under the stimulus package announced by the government for SME sector, Industries Ministry has sought Tk1,100 crore as seed money for providing loan assistance to the micro and small entrepreneurs outside the banking system, reports BSS.
“With the seed money, the SME Foundation will implement a loan program of Tk500 crore and Bangladesh Small and Cottage Industries Corporation (BSCIC) will also operate another programme of Tk600 crore for micro and small entrepreneurs,” said an Industries Ministry press release issued yesterday.
The ministry has taken the initiative considering the sufferings of the micro, small and cottage industries due to Covid-19 outbreak.
To this end, the Industries Ministry sent a letter to the Finance Ministry on April 30.
According to the letter, Bangladesh Bank issued a circular on April 13 to disburse the stimulus package of Tk20,000 crore, announced by the Prime Minister on April 5 for the SME sector.
According to the circular, commercial banks will conduct lending activities on the basis of bank-customer relationship and the borrowers will get special benefits in case of taking loans.
The letter further said that an 11-member committee headed by an additional secretary of the Ministry of Industries was formed on April 18 for formulating effective steps and recommendations in this regard.
At the first meeting of the committee it was informed that at present, about 15% entrepreneurs in small and cottage industries are doing business with loans from banks.
The remaining 85% of entrepreneurs are not involved in formal lending activities and not accustomed to maintaining formal accounts in conducting business activities.
At the meeting, it was decided to run a special loan program through SME Foundation and BSCIC by collecting seed money on an urgent basis for all these micro and small entrepreneurs.
So, the Industries Ministry sent a letter to the Finance Ministry on April 30 to allocate a total of Tk1,100 crore as seed money in favor of SME Foundation and BSCIC for the implementation of the special loan program.