Dhaka, Bangladesh (BBN) – The central bank of Bangladesh is going to start disbursement of JICA (Japan International Cooperation Agency) fund worth BDT 4.15 billion for the development of SME sector by the end of the current month, officials said.
“We will collect applications from the banks and non-banking financial institutions (NBFIs) on July 16 and after scrutiny the applicant institutions will get the loan within ten days,” a senior official of the Bangadesh Bank (BB) said.
This is a two-step loan fund for refinance or pre-finance under JICA assisted Financial Sector Project for the Development of Small and Medium Enterprises (FSPDSME).
The banks and NBFIs will get the opportunity to apply to Project Implementation Unit (PIU) of SME and Special Program Department of Bangladesh Bank twice a month for SME loan under the JICA funded project.
The BB official said the central bank has already signed agreement with 21 banks and 18 NBFIs and rest of the banks and NBFIs are invited for SME loan disbursement to boost small and medium enterprises sector.”
According to BB rules for eligibility of availing the fund, the banks and NBFIs have to comply with some of its conditions — the institutions have to comply with anti-money laundering instructions, have to make profit for at least three consecutive years, classified loans of the institutions should be less than 10 per cent.
“Any small and medium entrepreneurs will be able to get loans amounting BDT 5.0 million to BDT 50 million under the project,” the central banker said.
Under the two-step loan fund, participating financial institutions will be provided with refinance or pre-finance for lending to SME sub-projects of productive investment for medium to long term duration.
The central bank also said the BB will disburse loans with five per cent interest to the banks and NBFIs and these financial institutions will provide loan to the entrepreneurs as per the interest rate rules of the central bank.
He also urged the chambers and concern institutions to inform the small and medium entrepreneurs about the JICA loan and motivate them to apply to the banks and NBFIs.
BBN/SSR/AD-07July12-1:30 pm (BST)
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