Unsecured loans have to be ensured for small women entrepreneurs: BB

The Bangladesh Bank has brought some changes in the manual of the Credit Guarantee Scheme to ensure unsecured loans for women cottage, micro and small (CMS) entrepreneurs.

The manual, prepared on 3 November last year, addresses women's priority in getting unsecured loans, but no specific amount was mentioned for them.

This time, the central bank said banks and financial institutions participating in the implementation of the incentive package should reserve at least 5% of their portfolio guarantee limit for women entrepreneurs.

The Credit Guarantee Schedule unit of the Small Medium Enterprise and Special Programmes Department of the central bank issued a circular in this regard on Tuesday.

Under the Tk20,000-crore incentive announced last year for the Cottage, Micro, Small and Medium Enterprises (CMSMEs) to offset the loss of Covid-19, the central bank would pay up to 80% of the original loan from the Credit Guarantee Scheme if loans disbursed to the cottage, micro and small industries are not recovered.

The scheme was launched on 27 July last year and so far, only Tk29 crore has been disbursed from the scheme at the request of the banks.

An official of the central bank told The Business Standard that the scheme has been introduced so that banks can provide loans to potential small entrepreneurs who are unable to provide collateral against the loans.

However, small entrepreneurs are not aware of this guarantee scheme and due to a lack of publicity, customers are not coming to take loans from banks under the scheme. As a result, only Tk29 crore has been released from the fund.

Although the credit guarantee scheme facility is only for working capital, it was given for term loan too on 1 February, considering the overall situation of Covid-19.

Meanwhile, the banks have not been able to implement the Tk20,000-crore incentive package for the CMSME sector even though it was launched in April last year.

Until 22 April this year, Tk14,550 crore has been implemented. Due to a delay in implementation, the Central Bank has set a new deadline of 30 June.