The Bangladesh Bank has launched a Tk3,000-crore refinancing scheme for low-income people, including farmers and marginal or small businesses, at 9 percent interest rate.
The loans will be distributed through microcredit entities in order to ensure they reach the grassroots level.
The central bank has launched this fund in addition to the existing Tk5,000-crore special scheme for the farmers through the banking channel at 4 percent lending rate.
The new loan will offer a three-month grace period for microcredit NGOs, according to the Bangladesh Bank guidelines issued yesterday.
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 that the 9 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 1 percent lending rate. The banks will then lend to microcredit organisations at 3.5 percent rate.
The NGOs will not be allowed to impose any other charges, except fees for admission, passbook, loan forms and non-judicial purposes, from the borrowers, said the guidelines.
Microcredit entities will be allowed to collect loan instalments on weekly or monthly basis after the three-month grace period, and they will have to repay banks on a quarterly basis.
Simultaneously, the banks will have to repay the central bank with the loan on a quarterly basis. The responsibility of the loan recovery would be on NGOs and banks, the central bank guidelines said.
Low-income people, farmers and marginal or micro businesses will get loans for income-driven purposes.
From the NGOs, a single individual can borrow maximum Tk75,000, while the borrowing limit for a group of five individuals has been set at Tk3 lakh.
NGOs' lending limit to a single small entrepreneur has been set at Tk10 lakh, while the limit would be Tk30 lakh for a joint project of a group of at least five members.
The borrowing capacity will rise proportionately with the increase in the number of members in the group.