SME Foundation waives off 100C loans

The Small and Medium Enterprise (SME) Foundation has waived off loans of around Tk100 crore last month through 19 banks and financial institutions in order to revive the SME sector from the losses incurred during the pandemic. 

According to the foundation, so far Tk42 crore has been released for 316 entrepreneurs and another Tk42 crore has been sanctioned for 230 entrepreneurs and loans of Tk54 crore for 268 more entrepreneurs are in the process of approval.

Officials of the SME Foundation revealed this at an Entrepreneur-Banker-Matchmaking Event in Sylhet on October 30. 

The Foundation organized the event to extend the government's incentive package loans to SME entrepreneurs in highly affected areas who have suffered from losses due to the Covid-19 pandemic. 

Md Masudur Rahman, the chairperson of the SME Foundation, said that entrepreneurial organizations can play an important role in bridging the gap between bankers and SME entrepreneurs.

“Although the process of disbursement of loans to small entrepreneurs is more expensive than that of big entrepreneurs, we thank the banks and financial institutions for coming forward to disburse loans from government incentives,” he added.

Md Shafiqul Islam, executive director of Bangladesh Bank, said that a hotline could be set up to ensure smooth disbursement of the loans from the government incentive packages.

Md Mafizur Rahman, managing director of the SME Foundation said that in the case of small entrepreneurs, there is no precedent of non-repayment of loans. 

He also urged the banks to simplify the rules for lending to SME entrepreneurs.

“Entrepreneurs should prepare the necessary documents to get loans easily. We hope that the loan disbursement of Tk200 crore will be completed by December 31 of the current financial year,” he added. 

The foundation signed agreements with 19 banks and financial institutions in September of this year to disburse loans worth Tk200 crore to small and medium entrepreneurs under the second phase of the government's incentive package to offset the loss caused by the pandemic.

According to the SME Foundation, the Finance Ministry has a specific policy on incentive disbursement-- rural and marginal entrepreneurs who did not take out loans under the last package will be prioritized this year, along with new and third gender entrepreneurs.

Entrepreneurs will get loans at 4% interest under the incentive package and they will get a loan starting from Tk1 lakh to a maximum of Tk50 lakh.

The loans can be repaid in a maximum of 24 equated monthly instalments based on the banker-client relationship. 

After submitting the complete loan application along with the required documents to the bank, the bank will take the initiative to disburse the loans.

The loans will generally be disbursed in favour of single and joint ventures. 

However, group-based loans can be disbursed in favour of a maximum of five entrepreneurs based on banker-client relationship and consensus to bring marginal, small, and especially women-entrepreneurs under the loan coverage. 

The SME Foundation, in consultation with partner banks and financial institutions, will appoint focal officers in one or more branches.

Entrepreneurs will have to contact the focal officer, who will coordinate with the SME Foundation, the bank’s head office, and branches for quick loan disbursal.

Powered by Froala Editor