Dhaka, Bangladesh (BBN)- The central bank of Bangladesh will scale down the minimum amount of loans for small and medium enterprises (SMEs) so that more such enterprises can have access to credit facilities, officials said.
Under the new provision, the banks will be allowed to sanction loans of minimum Tk 50,000 instead of existing Tk 200,000 for SME financing. The upper limit for such loans, however, will remain unchanged at Tk 5.0 million.
Currently, the banks can sanction loans between Tk 200,000 and Tk 5.0 million, to any single SME to any subject to fulfillment of certain conditions by the borrowers.
“We’ve decided to relax the minimum limit of SME loans to facilitate the entrepreneurs’ particularly small ones,” a senior official of the Bangladesh Bank (BB) said, adding that the central bank would issue a circular in this connection soon.
“Other terms and conditions for SME loans will remain unchanged,” the BB official said, adding that the borrowers would be able to use the fund as working capital as well as term loan.
The central bank earlier asked the commercial banks to ensure proper utilisation of loans for SMEs to avoid any financial risks.
Under the existing definition, the small enterprises are, in principle, not public limited companies. The criteria for such a company in service sector has been set with a total fixed asset worth Tk 50,000 to Tk 5.0 million, excluding land and building and the number of employees less than 25 persons.
A small enterprise in trading should have total assets worth Tk 50,000 to Tk 5.0 million, excluding the value of fixed asset and the number of employees at 25.
Total asset for a small enterprise in manufacturing sector has been set at Tk 50,000 to Tk 5.0 million excluding land and building and number of employees less than 25 persons.
BBN/SS/SI/AD-15Feburay10-10:55 am (BST)