Bangladesh Bank (BB) on Monday unveiled two new revolving refinance schemes worth a combined Tk 60 billion to support cottage, micro, small and medium enterprises (CMSMEs) and promote environmentally sustainable industrial development.
The central bank launched a Tk 50 billion refinance fund for the CMSME sector and a separate Tk 10 billion scheme for green industries and eco-friendly factory buildings, aiming to boost investment, production, employment and sustainable economic growth, reports BSS.
The initiatives were announced through separate circulars issued by Bangladesh Bank's SME and Special Programmes Department and Sustainable Finance Department.
The larger Tk 50 billion revolving refinance fund has been created using surplus liquidity of scheduled banks and will remain in force for three years. The scheme is designed to address working capital shortages faced by active CMSMEs, helping them maintain production and service activities while creating direct and indirect employment opportunities.
Under the programme, Bangladesh Bank will provide refinance facilities to participating banks at an interest or profit rate of 4.0 per cent. Banks, in turn, will be allowed to charge end borrowers a maximum interest or profit rate of 9.0 per cent.
The revolving nature of the fund will ensure continuous availability of liquidity, as recovered loans will be recycled into fresh financing. Borrowers will also be eligible for a grace period of three to six months before repayment begins.
According to the circular, active CMSMEs experiencing disruptions in production or services due to working capital shortages will be eligible for financing. Refinance facilities will also be available against renewed working capital loans.
However, borrowers classified as defaulters in the Credit Information Bureau (CIB) database will not qualify for the scheme.
The central bank said businesses already receiving support under other refinance programmes may also be considered under the new facility, subject to banks' credit assessments and exposure limits.
All scheduled banks will be eligible to participate after signing a participation agreement with Bangladesh Bank.
