The small and medium enterprises (SMEs) of the country are turning things around by recovering from losses suffered amid the pandemic through the stimulus loans.
According to the SME Foundation, it disbursed loans of Tk300.19 crore among 3,106 CMSME entrepreneurs of 60 districts, 26% of whom were women business owners.
Earlier, the government announced a stimulus package of Tk1,500 crore in the second phase for the CMSME sector in January last year.
The SME Foundation has received Tk300 crore from the Ministry of Finance so far.
From the first phase, the SME Foundation said that they disbursed credit of Tk100 crore among 925 small entrepreneurs across the country until June.
In the second phase, they distributed the remaining Tk200 crore to 2,181 entrepreneurs from October-December of the current fiscal year.
The SME Foundation distributed Tk200 crore from the incentive package six months ahead of schedule.
Hasina Akter, an entrepreneur from Tangail, told Dhaka Tribune that her business was on the brink of collapse with declining sales due to the pandemic.
“In October last year, I got a loan of Tk1.5 lakh at 4% interest from Bank Asia with the help of the SME Foundation,” she added.
“It will take time to recover from the losses caused by the coronavirus pandemic, but getting this loan has accelerated my recovery process and given me new hope,” Akter further said.
Another entrepreneur from Dhaka, Taqdir Hossain, took a loan of Tk10 lakh from Bank Asia through the SME Foundation.
“The uncertainty has been overcome by getting this loan,” he added.
According to the SME Foundation, 1,462 entrepreneurs from the trading sector, 1,167 from the manufacturing sector, and 477 entrepreneurs from the service sector have gotten loans from the stimulus package so far.
About 1,553 loan recipients or 50% have received loans of less than Tk5 lakh, said the foundation.
The SME Foundation also said that 2,619 of the entrepreneurs are from the rural region and 15.67% or 487 entrepreneurs are from Dhaka.
In terms of loan disbursement, in the first phase, the SME Foundation prioritized SME sub-sector and cluster entrepreneurs, women entrepreneurs, new entrepreneurs, entrepreneurs of backward and tribal areas, physically challenged and third gender entrepreneurs.
The foundation signed agreements with 19 banks and financial institutions in September of last year to disburse loans to small and medium entrepreneurs under the second phase of the government's incentive package.
The Finance Ministry had a specific policy on incentive disbursement: entrepreneurs got loans at 4% interest under the incentive package and an entrepreneur will get a loan starting from Tk1 lakh to a maximum of Tk50 lakh.
The foundation’s close liaison and coordination with banks and non-bank financial institutions, trade body associations, and cluster associations were the main reasons for disbursing a certain amount of loans ahead of schedule.
Meanwhile, along with the SME Foundation, seven other organizations were given the responsibility to expand credit activities among entrepreneurs in rural areas.
Among these organizations, Tk100 crore was allocated to the Bangladesh Small and Cottage Industries Corporation (BSCIC) for disbursal, Tk50 crore to Joyeeta Foundation, Tk50 crore to NGO Foundation, Tk300 crore to Social Development Foundation, Tk300 crore to Palli Daridro Bimochon Foundation (PDBF), Tk100 crore to Small Farmer Development Foundation, Tk300 crore to Social Development Foundation, and Tk 300 crore was allocated to the Bangladesh Rural Development Board.
In the first phase, the SME Foundation and BSCIC disbursed 100% of the allocated amount in the specified financial year, but most of the institutions have not been able to disburse the incentive loans properly, which make up for 52% of the total allocation.
