Give collateral-free loans to SMEs, PM urges banks

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FE Report
Prime Minister Sheikh Hasina has urged banks to give collateral-free loans to small and medium enterprises (SME) for the development of the sector.
"I request you (banks) to charge reasonable interest for the SMEs so that entrepreneurs can come forward and ultimately make the country moving forward," she said at the inaugural programme of the two-day SME Financing Fair 2009 at a city hotel Tuesday.
The programme has been organised by Dhaka Chamber and SME Foundation and the co-organiser is IFC-BICF.
The lending rate for SME has been fixed at 13 per cent and gradually it will be reduced, she said adding, "Finance Minister and Bangladesh Bank Governor will take steps in this connection."
"The banks and financial institutions are helping the sector now as the government has taken a number of steps for the development of the SME sector," the Prime Minister said.
The government will announce a new industrial policy soon, she said adding, "We want to increase the contribution of industrial sector to 40 per cent from 25 per cent to the GDP."
SMEs are the backbone of the economy of a country and in Bangladesh 95 per cent industrial units are SMEs, Hasina said.
The Prime Minister said the number of self-reliant women should be increased by encouraging them to engage in SME activities.
Citing problems faced by the sector, she said the government has taken steps to mitigate lack of access to capital, high interest rate, low technology and lack of knowledge to diversify products.