 | SME financing products by banks and NBFIs
15 October, 2011
It was not until 2010 that the government and policymakers recognised the importance of providing extensive credit facilities to small and medium sector entrepreneurs to promote various initiatives, especially start-up enterprises as well as ones looking to scale up. The banks and other financial institutions, however, have been providing loans to such enterprises for long, though not in the nomenclature of SME Financing.
Now, almost all banks and non-bank financial institutions (NBFI) in the country are providing loans to the sector, under different governmental schemes as well as through their own product portfolios. New Age provides a list of some of the major products available in the market, from some of the leading banks and financial institutions, for the benefit of potential entrepreneurs and those looking for further investment.
Brac Bank Limited
Being the youngest bank, BRAC Bank in the last ten years served 3.75 lakh customers and released around Tk 14,000 crore as loans to SME entrepreneurs. The bank at present offers a range of SME loan products. Anonno is a small scale business loan ranging between Tk 3 to Tk 10 lakh while Prothoma is a term loan of maximum Tk 10 lakh for small scale businesses operated by women entrepreneurs. These loans can be availed by a business having a valid trade license and do not require a security. These loan schemes have been operating for more than two years.
The package called Durjoy is offering Tk 3 lakh to Tk 25 lakh loan also without any security.
Dhaka Bank Limited
Recognising quite early the SME segment’s value addition and employment generation capabilities, Dhaka Bank has pioneered SME financing in Bangladesh since 2003, focusing on stimulating the manufacturing sector and actively promoting trading and service businesses.
The bank offers different revolving and renewable lines of credit against mortgage of collateral for SMEs with two years experience in the line of business and satisfactory credit report. In a range of such loan products – overdraft work order, overdraft pay order, overdraft share, secured overdraft and overdraft SME – small business can take maximum Tk 50 lakh and medium enterprises Tk 1 crore. The interest rate for male entrepreneurs in small enterprises varies from 13 to 17 per cent while for women it is 10 per cent. For medium enterprises the rate is 13 per cent, for both men and women entrepreneurs.
Eastern Bank Limited
Established in 1992 out of former BCCI Bank, EBL is now focusing more on the SME sector. It has separate, dedicated centres and desks for SMEs and also special desks for SME women entrepreneurs. It has introduced different types of specialised loan products (on equated monthly instalment basis) and also liability products for SMEs.
At present EBL has about 6,000 SME clients and approximately disburses around Tk 1,000 crore per year. The bank has collateral free loan products for small segment clients and partial secured loans for small and mid segment clients, with a repayment period up to 60 months. EBL offers a wide range of products covering small and medium enterprises, women entrepreneurs and import oriented customers.
EXIM Bank Limited
The bank disburses loans in single or multiple phases according to the nature and requirement of businesses and also offers single or multiple repayment installments as per the returns of the business. Having a record of successful business operation for two years, small entrepreneurs can borrow Tk 2 lakh to Tk 10 lakh while the medium entrepreneurs can take Tk 10 lakh minimum and Tk 50 lakh maximum, against proper collateral depending on whether it is located on the proprietor’s own land or on a leased property. On the basis of satisfactory business transaction and business requirement, the bank also offers the opportunity of enhanced investment.
Release link:http://newagebd.com/newspaper1/special/36613.html
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