The time limit for banks to distribute the government's Covid-19 stimulus package for pandemic-affected Cottage, Micro, Small and Medium Enterprises (CMSMEs) has been extended by another three months, says a press release.
The central bank extended the time after the banks concerned failed to distribute the Tk20,000cr stimulus funds by the deadline, according to a circular issued Sunday by the SME and Special Programmes Department of Bangladesh Bank.
As per the new extension, the distribution of the funds must be completed by 31 March. Earlier, after extending the deadline several times, the time limit was fixed for 31 December.
According to sources at the central bank, Tk12,000cr was distributed from the package by the end of December 2020. Due to various complications, the banks were unable to disburse the incentive loans speedily among the CMSMEs.
On 28 November, the allocation for the trading sub-sector under the package was increased from 30% to 35% due to high demand for credit in the sub-sector.
Noting that it has accelerated the disbursement process, sources at the central bank hope all the loans will be disbursed by March this year.
The Tk20,000cr incentives package for the CMSME sector was announced on 5 April last year as part of the government's initiative to revive the country's pandemic-affected economy.
The interest rate of the loan taken under the package is 9%. The government is giving a 5% interest subsidy and clients are paying the remaining 4%.