 | BB, JICA team up for small businesses
07 August, 2011
Bangladesh Bank and Japan International Cooperation Agency (JICA) have signed an agreement to provide financing facilities to the country's small and medium enterprises.
Under the deal, JICA will lend Tk 400 crore to the central bank to be refinanced among Bangladesh's private commercial banks for distributing among SMEs for buying machinery and technology.
Officials said Bangladesh Bank will provide the fund in two modes. “Firstly, the banks can first provide the loans and then make a claim with the central bank,” said an official of the central bank's SME and Special Programmes Department.
“Secondly, the banks can forward a list of names to the central bank which they want to lend. We will verify whether any person is bankable or a project is viable or not,” he said.
The official said the financial regulator has also brought in some changes in the refinancing system. “Banks normally claim money with the central bank against their loans given to SMEs on a quarterly basis. As a result, they do not feel encouraged as their money is held up for a period.”
“Now they will be able to make the claim 15 days after disbursing the loans,” he said.
The official said they are also making it mandatory to disburse loans among major loan recipients so that banks cannot hold the money in the bank.
Under the assistance, the central bank will organise national training programmes and workshops for bankers to make them aware of the importance of SME lending as well as the risks associated with the lending.
Release link:http://www.thedailystar.net/newDesign/news-details.php?nid=197491
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