Tk 20m collateral free loan for small footwear makers

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FE Report
South East Bank Limited (SEBL) has signed an agreement with Leather Sector Business Promotion Council (LSBPC) to develop a dedicated credit line for the underprivileged producers of footwear and leather goods in the country.
Under the accord, SEBL will disburse Tk 20 million collateral free loan among the small and medium footwear and leather goods manufacturers for the second phase of the Bangladesh Leather Service Center (BLSC) project of LSBPC.
The two sides inked a Memorandum of Under-standing (MoU) in this regard in the city Thursday. Governor of Bangladesh Bank Dr. Atiur Rahman attended the signing ceremony as the chief guest.
Lamenting the sorry state of the 'highly potential' leather sector, Bangladesh Bank governor in his speech said: "Although, there are 76 branches of different banks and financial institutions active in the old part of Dhaka city, only 2.0 percent of the leather goods manufacturers located in the area received bank loan in 2006".
He also hoped that with the success of the ongoing BLSC, which is a pilot project, banks would be able to open this loan scheme for other members of the target group.
"Hopefully, by next year, the BLSC pilot project would be able to create a model of 'need based loan' scheme, which would be replicated by other banks and financial institutions," Atiur added.
Speaking on the occasion, Chairman of SEBL Alamgir Kabir in his speech said: "The size of the credit line, which now amounts to Tk. 20 million, would be enlarged if the BLSC project becomes a success".
Secretary to the Ministry of Commerce Feroz Ahmed, who attended the occasion as the special guest said, "It is a cautionary sign that some certain segments of leather sector have experienced negative export growth during the time of the global meltdown".
Managing Director of SEBL Mahbubul Alam in his speech said: "Recently, our bank is moving for loan diversification both in terms of sectors as well as geographical regions".
National Consultant of BLSC project Mohammed Hossain also spoke on the occasion.
Under the scheme, credit ceiling for each enterprise would be minimum Tk. 0.2 million to Tk. 0.5 million and refinance would be available from Bangladesh Bank at a rate of five percent while the interest rate would be 12 percent, of which two percent would go to the poverty alleviation fund, the authority informed.