Women entrepreneurs to get loans at 5% interest: Bangladesh Bank

Bangladesh Bank has reduced the interest rate from 7% to 5% to encourage women entrepreneurs to engage in business with low-interest loans.
 

At the same time, the central bank has reduced the interest rate from 3% to 0.5% at the institutional level as an incentive to banks and financial institutions for providing loans to women entrepreneurs.

The country's central bank issued a new circular on Wednesday regarding this matter. This lowered interest rate facility has been introduced under Bangladesh Bank's "Small Enterprise Refinancing Scheme." The size of the Small Enterprise Refinancing Scheme has also been increased from Tk850 crore to Tk1,500 crore, giving priority to loans for women.

Under Bangladesh Bank's refinancing scheme, banks and financial institutions may provide loans of up to Tk25 lakh on the personal guarantee of women entrepreneurs as collateral.??Check

Earlier, the central bank had set a target of giving at least 15% of all small and medium-sized enterprise (SME) loans, to women entrepreneurs, by 2024.  In the new circular, Bangladesh Bank has directed that loans be disbursed to women entrepreneurs on a priority basis at new interest rates.

The issue of collateral for women entrepreneurs is considered to be one of the major problems in the expansion of cottage, micro, small and medium enterprise (CMSME) loans. To address this problem, the central bank has allowed giving loans against personal, social, and group guarantees as collateral.

According to stakeholders, one main reason why women entrepreneurs are not getting low-interest loans is that they fail to provide necessary documents. Entrepreneurs, on the other hand, say that bankers simply do not want to give loans to women entrepreneurs.

The central bank currently has four refinancing schemes in operation and the country's banks have about 11,000 branches across the country. There are instructions to train at least three women entrepreneurs at each branch location every year and then lend to at least one of them.