Experts on Saturday called for proper utilization of the credit guarantee scheme to encourage lending to potential cottage, micro, small, and medium enterprises (CMSMEs).
Dubbing the CMSMEs as the engine of the country's economy, they urged banks and financial institutions to disburse more funds to small entrepreneurs so that they can bounce back from the pandemic.
Dhaka Chamber of Commerce and Industry (DCCI) organized the workshop titled "Issues and Opportunities of CMSME Lending'' in the capital, said a DCCI press release.
Deputy Governor of Bangladesh Bank (BB) Abu Farah Md Nasser addressed the event as the chief guest.
Nasser said the central bank has created a fund of Tk2,000 crore for credit guarantee schemes with a view to giving collateral-free loans, especially to the CMSMEs.
But out of that amount, only Tk192 crore has been disbursed till date, which is disappointing, he said, adding that proper utilization of this scheme is a must for the revival of CMSMEs.
He suggested that banks should establish more sub-branches across the country rather than only focusing on agent banking for a better reach to CMSMEs at the grassroots level.
About interest rates, the deputy governor said: "We are going through a tough time due to the Ukraine-Russia war. If we try to control the interest rate forcibly at this time, it may lead to recession."
Considering the global scenario, manufacturing and service sectors should get priority in getting loan right at this moment in order to check inflation, he also said.
DCCI President Rizwan Rahman said the CMSME sector plays important roles in making the country's economy grow, but due to lack of policy support and financial assistance, the sector couldn't be utilized fully.
Mentioning that commercial banks and financial institutions sometimes feel risky to give loans to CMSMEs, he said: "Till 2022, out of Tk20,000 crore stimulus packages for SMEs, about 73.77% or Tk14,746 crore has been disbursed but most of it went to medium enterprises."
Rahman urged the regulators to give CMSMEs more access to information and communication technology as well as financial assistance so that they can attain the ability of manufacturing.
General Manager of SME Foundation Md Nazeem Satter said only banks are not sufficient to ensure loans for over 7.8 million CMSMEs in the country.
He suggested capacity building of MFIs, NGO Foundation, Karmasangsthan Bank, BSCIC, and SME Foundation to increase lending to those small businesses.
Central bank's SMESPD Director Md Jaker Hossain said the CMSME sector's contribution to GDP is about 25% now, and in 2024, it will be around 32%, while by the year 2027, it will reach 40%.
