Entrepreneurs ask for a separate SME bank to ease loan disbursal
The SME Foundation is aiming to lend more than 30% of the Tk200 crore incentive package allocated for small and medium enterprises (SMEs) to women entrepreneurs.
They also plan to start the distribution of the loans from the third week of September, Dr Md Mafizur Rahman, managing director of SME Foundation, announced at a virtual meeting on Saturday.
About 90 entrepreneurs, including a representative of the board of directors of SME foundation Mirza Nurul Gani Shovon, former member Rashedul Karim Munna, and representatives of various trade bodies and associations, participated in the meeting.
Farzana Islam, general manager of SME Foundation, coordinated the meeting.
Mafizur Rahman said disbursement of the loans could start in the third week of this month after signing agreements with banks and non-bank financial institutions.
“To bring more entrepreneurs from the marginal levels under loan coverage, the maximum loan limit has been reduced to Tk50 lakh from Tk75 lakh,” he added.
Since there are limited funds, this will ensure that more entrepreneurs get access to the incentive package, the foundation explained.
Rahman also said that to bring the real cottage, micro, small and medium enterprise (CMSME) entrepreneurs impacted by the coronavirus under the loan coverage, the disbursement policy had been amended at the 123rd meeting of the board of directors of the foundation.
At the meeting, the board proposed to disburse 10% of the total loans to SME cluster entrepreneurs across the country.
A target has also been set to lend 70% of the loan to entrepreneurs in the manufacturing and services sectors, and 30% to entrepreneurs in the trading sector.
However, for women entrepreneurs, the rate in the trading sector can be up to 40%.
Moreover, a checklist of required documents will be provided by the bank to ensure easy access to the loan for entrepreneurs as soon as possible after the application and it has been included in the policy to state the reasons for getting or not getting the loan within five working days.
At the meeting, several entrepreneurs demanded the establishment of a separate SME bank, citing the need to eliminate the harassment by conventional banks.
Mafizur Rahman said that the foundation will advocate for a separate SME Bank to ensure easy access to banking facilities including loans for SME entrepreneurs.
He also hoped that the distribution of the Tk200 crore would be completed by December 31 this year.
The process of signing agreements with Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, and some new public-private banks and financial institutions has already started, Rahman added.
According to the SME Foundation, the Finance Ministry has a specific policy on incentive disbursement —rural and marginal entrepreneurs who did not take out loans under the last package will be prioritized this year, along with new entrepreneurs and third gender entrepreneurs.
Entrepreneurs will get loans at 4% interest under the incentive package.
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The loans can be repaid in a maximum of 24 equated monthly installments based on the banker-client relationship.
After submitting the complete loan application along with the required documents to the bank, the bank will take the initiative to disburse the loans.
The loans will generally be disbursed in favour of single and joint ventures.
However, group-based loans can be disbursed in favour of a maximum of five entrepreneurs based on banker-client relationship and consensus to bring marginal, small, and especially women-entrepreneurs under the loan coverage.
The SME Foundation, in consultation with partner banks and financial institutions, will appoint focal officers in one or more branches.
Entrepreneurs will contact the focal officer, who will coordinate with the SME Foundation, the bank’s head office, and branches for quick loan disbursal.