Experts at a seminar during the National SME Product Fair said that several banks were skeptical about lending to cottage, micro, small and medium enterprises (CMSMEs) as they were already burdened with default loans.
"Amid such a situation, we are even afraid to give loans to small entrepreneurs," said Syed Mahbubur Rahman, managing director of Mutual Trust Bank.
"Even in the case of small loans, we have to think again and again whether we will get back the money."
The former chairman of the Association of Bankers Bangladesh further added that large borrowers were taking undue advantages.
A big problem for banks is that large companies take loans but do not repay on time. Power sector companies are a case in point, he explained.
In contrast, SME loans should be based on cash flow, Rahman said, adding that it, however, is not happening now.
"The struggle for small-scale entrepreneurs to get bank loans in the current situation has increased considerably than in the past. Mounting default loans by large borrowers may be one of the key reasons," said SME Foundation chairperson Md Masudur Rahman.
CMSMEs now face a lot of obstacles to manage proper documents, collateral and guarantors to get a small loan, he said, adding that women entrepreneurs, particularly in rural areas, suffer the most.
Speaking as the chief guest, Planning Minister MA Mannan said guaranteeing loans for CMSMEs is a great pain.
"I will urge the government to be their guarantor. Such entrepreneurs have no headaches with interest rates. They need loans without delay. But when they go to take loans, banks show them many formalities. This should not happen."
The 10-day National SME Product Fair is going on in full swing, with entrepreneurs getting good responses from visitors.
