BB creates $240m fund for SMEs

Bangladesh Bank (BB) has created a US$240 million refinancing fund for providing loans to small and medium enterprises (SMEs) at low interest, reports BSS.

"Asian Development Bank (ADB) will contribute $200 million while the government will provide the rest $40 million to the fund," said a senior BB official on Friday.

Under the refinance scheme, banks and financial institutions (FIs) can provide maximum 90 per cent of the total project cost and borrower will have to bear the rest of the cost, according to a recent circular issued by the central bank.

The borrowers will get maximum Tk 3 crore in loans, the circular added.

The circular also said the highest tenure of a mid-term loan will be three years and that for a long-term loan will be five years. The refinancing scheme will be applicable to the projects outside Dhaka and Chittagong metropolitan areas.

The central bank will take four per cent interest from the banks and FIs. But BB has directed the banks to give loans to male borrowers on the basis of market rate of interest. From the fund, 15 per cent will be reserved for women entrepreneurs and the highest interest rate for them will be 10 per cent.