Bangladesh Bank on Wednesday increased the limit of credit facilities for small, micro, small and medium entrepreneurs up to Tk 5 crore which would be sanctioned by banks and other financial institutions under the Bank’s credit guarantee scheme. Bangladesh Bank to overcome the impact of Covid-19.
Previously, there was a credit guarantee facility between Tk 25,000 and a maximum of Tk 1 crore under the scheme.
On Wednesday, the BB issued a new circular regarding the issue.
The BB has taken the decision to ensure 100% implementation of the third phase of disbursement of the Tk 25,000 crore loan in the CMSME sector announced by the government.
The credit limit has been reset to a minimum of Tk 25,000 and a maximum of Tk 5 crore, the circular also said.
According to the guidelines of the BB credit guarantee program, banks or financial institutions will be allowed to draw 30% of their total loans distributed on the program if the disbursed amount becomes unpaid.
Banks will see 70% of their funds disbursed to a single company if the amount is classified.
However, a lender will not be allowed to recover more than 30% of its funds disbursed by the program.
A portfolio guarantee limit of 10% should be reserved for women-owned MSMEs.
Customers will have to pay a 1% commission on their loans to banks when they use the fund, while lenders will have to deposit the commission with the central bank within 15 days.
As part of the central bank’s stimulus package for the CMME sector, borrowers will receive loans in the form of working capital with a maximum repayment term of one year.