Despite Bangladesh Bank’s efforts, SME loan disbursement growth remained slower last year compared to that in the previous year.
The central bank attributed prolonged political unrest and business stalemate to the slower growth.
The SME (small and medium enterprise) loan disbursement was about 10.79% higher to Tk1,15,870 crore in 2015 against the target of Tk1,04,586 crore.
It was 13.34% higher than the target in the 2014.
The new SME loan target has been set at Tk1,13,503 crore for the year 2016, which is 8.53% higher than the previous target of Tk1,04,586 crore.
Both achievement and target growth of SME loan disbursement were slow due to business stalemate last year, said Swapan Kumar Roy, general manager of SME, Special Programme Department of Bangladesh Bank.
“We feared that the loan disbursement target may not be achieved due to lack of demand amid sluggish business,” he said.
Though at last the achievement rate crossed expectation because of speedy disbursement at the end of 2015, SME loan growth rate remained slower than that in the previous year, he said.
Meanwhile, Bangladesh Bank adopted SME sector expansion policy, emphasising SME loan disbursement in recent monetary policies to achieve private sector credit growth.
Banks were repeatedly advised to divert their loans towards SME sector as the credit growth was remaining far below the ceiling set in the monetary policies.
As part of the effort to increase SME loan disbursement, the central bank recently issued a circular, directing all banks to keep the spread of SME loans at logical level.
Nirmal Chandra Bhakta, executive director of Bangladesh Bank, attributed high interest rate to slower SME growth.
He said though the high interest rate hurt the SME loan disbursement growth there is no chance of setting cap on interest rate of SME loans at this moment like farm loan at maximum 11%.
Foreign donors will be discouraged from providing fund through different projects to pull up SMEs if a maximum interest rate is set, he said while addressing a press conference over SME loan disbursement target and achievement held yesterday in the central bank headquarters.
He, however, hopes that SME interest rate will come down to a single digit within the next year as the average lending rate of 11.18% in the market is in downward trend.
All state banks except Agrani fell behind the target of SME loan disbursement last year.
Agrani achieved 102% of its target while BASIC Bank achieved 73.85%, Janata Bank 98.61%, Rupali Bank 98.20% and Sonali Bank 77.44%.
SME General Manager Swapan Kumar explained that state banks’ performance is poor in SME loan disbursement as they are burdened with huge Non-performing Loan (NPL). As a result they do not get refinancing from Bangladesh Bank for SME loans.
“Still we are happy with their performance as they are doing well despite the lack of refinancing fund.”
The number of women entrepreneurs came under SME programme improved significantly to 1,88,233 last year from 42,730.
This is due to the mandate of Bangladesh Bank that at least one woman entrepreneur has to be financed every year from every branch, said Swapan.
The central bank issued a circular in this regard in April last year as an effort to build women entrepreneurship, he added.
