SME sector will get loans from incentive package till 30 June

The implementation period of the first phase of the incentive package for the Cottage, Micro, Small and Medium Enterprise (CMSME) sector has been extended to 30 June.

Earlier, the deadline was 31 March and last month it was decided not to extend it, however, considering the overall situation, the Bangladesh Bank has extended the implementation period by three more months.

The Central Bank's SME and Special Programmes Department issued a circular in this regard on Monday.

Out of Tk20,000 crore, loans amounting to Tk14,000 or 72.31% were disbursed until 31 March and noting this implementation satisfactory in the context of Bangladesh, the officials concerned of the Central Bank said that the implementation of the second phase of the package would start from April without extending the deadline for the first phase disbursement.

An incentive package of Tk20,000 crore was announced on 13 April last year to support SMEs during Covid-19. Although the loan interest rate under this package is 9%, the government is giving 5% interest as a subsidy, the customer has to pay only 4%.

The validity of this package is three years and loans will be available as working capital. A customer can avail of a loan from this package at subsidised interest only once. If anyone wants to take a loan again, he has to pay 9% interest.

Terming the extension of the new deadline a very good initiative, SME Foundation Chairperson Prof Md Masudur Rahman said, "I am hopeful that the 28% of the loan that has not been disbursed yet will be done within the new time frame."

He said that small and medium traders faced huge losses ahead of the Pohela Baishakh, Ramadan and Eid last year. A similar situation has been created again. This loan will help them at least a little bit.

Mentioning that it is somewhat difficult to give loans to the CMSME sector in the existing banking system, Masudur Rahman said that the government is going to bring a new package of Tk10,000 crore by including NGOs in this regard.

However, small and medium entrepreneurs need to be trained to ensure the proper utilisation of loans. The SME Foundation has provided some training but if NGOs were involved entrepreneurs would be benefited, he added.