BB creates Tk 30b loan scheme for small business

BB loan scheme
File photo shows a sugar cane crusher on the roadside in Dhaka. This type of small business on the footpaths is absolutely absent due to the shutdown amid COVID-19 pandemic

Bangladesh Bank (BB) has created a loan scheme of Tk 30 billion to help low income professionals, marginal farmers and micro enterprises continue their income generating activities amid the coronavirus disease (COVID-19) pandemic.

The target groups of low income people is expected to get access to the loan dubbed as “Revolving Refinance Scheme” through the micro finance institutions (MFIs) certified by the Microcredit Regulatory Authority (MRA).

The central bank introduced the new loan scheme of three-year tenure keeping a provision for increasing the fund size if necessary, according to a circular issued yesterday (Monday).

It said the low income groups are not being able to continue their income generating activities due to the pandemic.

“Bangladesh Bank has created the scheme to help the marginal group of people affected by the pandemic continue their income generating activities and to ensure inclusive development of the country,” said the circular.

Loans under the scheme will bear a maximum annual interest of 9.0 percent for the borrowers.

In accordance with the scheme policy, the central bank will initially provide the fund to banks at 1.0 percent interest and the banks will then lend the MFIs at 3.5 percent interest. The MFIs will be allowed to charge borrowers a maximum of 9.0 percent.

The owners of small businesses like roadside tea stalls would get loan up to Tk 75,000 individually and a group of at least five owners would get up to Tk 300,000. The loans must be paid back within one year.

However, the MFIs would be allowed to disburse loans ranging from Tk 1.0 million to Tk 3.0 million to small businesses with a payback period of two years. Defaulters are not eligible for the loan.

Warning: A non-numeric value encountered in /home/customer/www/ on line 308