Banks start releasing loans from incentives for marginalised entrepreneurs
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard
SATURDAY, MAY 21, 2022
SATURDAY, MAY 21, 2022
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Splash
  • Features
  • Videos
  • Long Read
  • Games
  • Epaper
  • More
    • COVID-19
    • Bangladesh
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Subscribe
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
Banks start releasing loans from incentives for marginalised entrepreneurs

Banking

Shafayat Hossain
14 July, 2020, 10:50 pm
Last modified: 14 July, 2020, 10:55 pm

Related News

  • Md Zakir Anam promoted as DMD of NCC Bank
  • Low-cost loan offer for cinema halls extended till December 
  • Foreign loans: ‘If our repayment capacity doesn’t increase, we will get in trouble with the interests’
  • Australia's central bank hikes interest rates, flags more to come
  • India to offer more incentives to lure companies in semiconductors push

Banks start releasing loans from incentives for marginalised entrepreneurs

Half a dozen banks have approved disbursing Tk314 crore but only Tk80 crore has been disbursed by two banks till July 12

Shafayat Hossain
14 July, 2020, 10:50 pm
Last modified: 14 July, 2020, 10:55 pm
Photo: Precondo.ca via Pixabay
Photo: Precondo.ca via Pixabay

HIGHLIGHTS:

SCHEME TO REVIVE RURAL ECONOMY

  • Tk3,000 crore refinance scheme announced on April 20
  • Target groups: farmers and micro and cottage businesses
  • Interest rate 9% of which BB will get 1%, banks 3.5% and NGOs 4.5%
  • Loans sanctioned till July 12: Tk314 crore, disbursed: Tk80 crore
  • An individual can borrow maximum Tk75,000, while a group of 5 individuals can borrow Tk3 lakh
  • An entrepreneur can borrow up to Tk10 lakh, while joint project of at least 5 members can borrow Tk30 lakh

 Banks have slowly started disbursing loans to microfinance institutions from a Tk3,000 crore refinance scheme announced by the government nearly three months ago. The scheme is intended to support farmers and marginalised enterprises in rural areas hardest hit by the Covid-19 pandemic.

Only half a dozen banks have approved disbursing Tk314 crore. Of this, Tk80 crore was disbursed by two banks to three microfinance institutions (MFIs) till July 12.

Forty-two banks have entered into an agreement with the central bank to disburse the loans under the scheme announced on April 20, and set a self-target of disbursing Tk2,552 crore from the fund. Till now only a few banks have approved loans for the purpose.

Pubali Bank disbursed Tk50 crore to Shakti Foundation this week to lend the money to marginalised individuals and enterprises.

"We have a plan to arrange one more loan scheme for farmers with another large MFI," Md Abdul Halim Chowdhury, managing director of the Pubali Bank, told The Business Standard.

Another two MFIs – the Society for Social Service and Palli Mongal Kramosuchi – have drawn Tk30 crore from City Bank recently. The bank sanctioned Tk120 crore for the MFIs – Tk60 crore each – under this refinance scheme. 

"The two MFIs can draw the rest of the funds any time," said Mashrur Arefin, managing director of City Bank.

The loans under the scheme will be distributed through microcredit entities in order to ensure they reach the grassroots level.

The Microcredit Regulatory Authority (MRA) has cleared 117 MFIs as they are capable of lending under this stimulus fund.

The new loan will offer a three-month grace period for microcredit non-governmental organisations (NGOs), according to the Bangladesh Bank guidelines.

An official of the central bank said the loans will not be disbursed through banks or non-bank financial institutions directly as they mostly do not have the capacity to reach villagers.

He also said the nine percent interest rate on the newly-announced loan is much lower than the rate charged by microcredit entities from their borrowers – microfinance firms usually charge up to 24 percent.

As per the Bangladesh Bank guidelines, the new loan will be disbursed first to banks at a one percent lending rate. Banks will then lend it to microcredit organisations at a 3.5 percent rate.

The NGOs will not be allowed to impose any other charges, except fees for admission, passbooks, loan forms and non-judicial purposes, from the borrowers, said the guidelines.

Low-income people, farmers and marginalised or micro businesses will get loans for income-driven purposes.

Md Serajul Islam, executive director and spokesperson of the Bangladesh Bank, said, "We are seeking the MRA's help to analyse MFIs' ability to disburse and recover the loans under this package."

"Banks have been recommended to report the progress on a regular basis, so that the central bank can properly monitor the utilisation of the funds," he added.

From NGOs, an individual can borrow a maximum of Tk75,000, while the borrowing limit for a group of five people has been set at Tk3 lakh.

NGOs' lending limit to a single small entrepreneur has been set at Tk10 lakh, while the limit will be Tk30 lakh for a joint project by a group of at least five members.

The borrowing limit will go up proportionately with the increase in the number of members in the group.

Ahsan H Mansur, executive director of the Policy Research Institute, said, "The package will be very helpful to revive the rural economy if it can be implemented properly."

Bangladesh / Economy / Top News

bank / loans / incentives / marginalised entrepreneurs

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Infographic: TBS
    Tough conditions get in way of Indian wheat import
  • Zahid Hussain/TBS Sketch
    Our problematic macroeconomic duo
  • US growth seen outpacing China’s for first time since 1976
    US growth seen outpacing China’s for first time since 1976

MOST VIEWED

  • Southeast Bank signs MoU with Hajj Agencies Association of Bangladesh
    Southeast Bank signs MoU with Hajj Agencies Association of Bangladesh
  • Govt’s bank borrowing 43% of target in 10 months of FY22
    Govt’s bank borrowing 43% of target in 10 months of FY22
  • Photo: Courtesy
    BB recognises Islami Bank for highest disbursement of agri-investment
  • Photo: Courtesy
    BB recognises Brac Bank for agricultural credit disbursement
  • South Bangla Bank Training Institute hosts workshop on banking ethics
    South Bangla Bank Training Institute hosts workshop on banking ethics
  • City Bank declares its 1st quarter 2022 financial performance
    City Bank declares its 1st quarter 2022 financial performance

Related News

  • Md Zakir Anam promoted as DMD of NCC Bank
  • Low-cost loan offer for cinema halls extended till December 
  • Foreign loans: ‘If our repayment capacity doesn’t increase, we will get in trouble with the interests’
  • Australia's central bank hikes interest rates, flags more to come
  • India to offer more incentives to lure companies in semiconductors push

Features

Mohammad (Mejbah) Mejbahuddin, Former Senior Secretary, Economic Relations Division (ERD), Ministry of Finance, Government of Bangladesh. TBS Sketch

‘No project is being delayed too long at the moment’

13h | Panorama
Dr Shamsul Hoque, Professor, Civil Engineering, BUET. TBS Sketch

‘Planning commission only in the name, there are no planners’ 

13h | Panorama
Masrur Reaz. TBS Sketch

‘To ensure accountability, contract financing should be based on ‘performance based payments’

13h | Panorama
Professor Mustafizur Rahman. Illustration: TBS

Project delays and escalating costs are driven by frequent revisions and lack of good governance

16h | Panorama

More Videos from TBS

Ways to retain body fragrance

Ways to retain body fragrance

14h | Videos
Gazipur restaurant that serves 150 food items

Gazipur restaurant that serves 150 food items

18h | Videos
How to prepare for a job

How to prepare for a job

19h | Videos
Putin's strategies to face Nato

Putin's strategies to face Nato

1d | Videos

Most Read

1
Tk100 for bike, Tk2,400 for bus to cross Padma Bridge
Bangladesh

Tk100 for bike, Tk2,400 for bus to cross Padma Bridge

2
A packet of US five-dollar bills is inspected at the Bureau of Engraving and Printing in Washington March 26, 2015. REUTERS/Gary Cameron
Banking

Dollar hits Tk100 mark in open market

3
The story of Bangladesh becoming a major bicycle exporter
Industry

The story of Bangladesh becoming a major bicycle exporter

4
PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire
Crime

PK Halder: How a scamster rose from humble beginnings to a Tk11,000cr empire

5
Representative Photo: Pixabay.
Bangladesh

Microplastics found in 5 local sugar brands

6
Mushfiq Mobarak. Photo: Noor-A-Alam
Panorama

Meet the Yale professor who anchors his research in Bangladesh and scales up interventions globally

The Business Standard
Top
  • Home
  • Entertainment
  • Sports
  • About Us
  • Bangladesh
  • International
  • Privacy Policy
  • Comment Policy
  • Contact Us
  • Economy
  • Sitemap
  • RSS

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net

Copyright © 2022 THE BUSINESS STANDARD All rights reserved. Technical Partner: RSI Lab