SME Foundation will provide a Tk400 crore loan to micro and small entrepreneurs in the country's rural and marginal population to accelerate economic recovery from the Covid fallout and to improve the rural living standard.
The entrepreneurs will be able to get a minimum of Tk1 lakh to a maximum of Tk30 lakh at 4% interest and repay in 30 monthly instalments in three years.
The Tk400 crore revolving loan package comprises Tk300 crore from the government stimulus and Tk100 crore from the foundation.
SME Foundation — a core institution for expansion and developing small and medium-sized enterprises (SMEs) in the country – has signed an agreement with 18 banks and financial institutions for loan disbursements.
Earlier, the foundation distributed Tk300 crore to 3,108 micro and small ventures under the government's Covid recovery schemes.
According to the foundation, entrepreneurs belonging to priority SME sub-sectors, manufacturing clusters and value chain of goods, women entrepreneurs, new entrepreneurs who have not yet received any loan from banks, entrepreneurs in tribal and marginalised areas, physically challenged and third gender entrepreneurs will be prioritised for the new loan package.
For women entrepreneurs, 25% of the total loan, which is Tk75 crore, will be earmarked. The disbursement will prioritise SME clusters and the value chain of local sectors.
In the first phase of the disbursement, micro-entrepreneurs will get Tk1 lakh to Tk10 lakh, while the amount in the second phase will be raised to more than Tk10 lakh up to Tk30 lakh.
In the previous stimulus disbursement, the highest lending ceiling for SMEs was Tk50 lakh. But as big ventures had easy access to the loan, the ceiling has been lowered this time.
The foundation says it will encourage the banks and financial institutions to disburse this collateral-free loan. The foundation will try to provide loans up to Tk30 lakh against individual, social and group guarantees based on the borrower-lender relationship.
Based on that relationship, the repayment also could be extended to 36 instalments.
According to the foundation, non-manufacturing sectors such as groceries, pharmaceutical stores, hardware shops and environmental polluters such as brick kilns and tobacco product sellers will not qualify for this loan.