WB offers spl fund for small Sidr-hit entrepreneurs

FE Team | Published: November 30, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Siddique Islam
The World Bank (WB) has offered a special fund only for very small entrepreneurs, particularly in the cyclone-affected areas, official sources said.
The Washington-based multilateral development partner has sent an initial proposal to the Bangladesh Bank (BB) for taking necessary measures in this connection.
"We are now examining the proposal," a BB senior official told the FE Thursday, adding that the central bank will take steps immediately after completing review of the proposal.
He also said the proposed special fund is as like as the Small and Medium Entrepreneurs (SME) Fund. But the fund will be used only for cyclone-affected areas to rehabilitate very small traders and entrepreneurs.
In the preliminary proposal, the WB wants the government-owned banks and financial institutions, which have branches in the cyclone-hit areas, to participate in the disbursement process of the re-financing fund.
But the central bank normally allows any bank or non-banking financial institution (NBFI), which has the amount of classified loans within the range of maximum 10 per cent.
Sources, however, said most of the government-owned banks and NBFIs may not be able to participate in the disbursement process as they have the amount of default loans above the range of 10 per cent.
The entrepreneurs, who have their fixed assets worth maximum Tk 10 million, will be eligible for the existing SME re-financing facility to boost their business.
The central bank had initiated a refinancing programme in the fiscal year 2004-05 by setting up the small enterprise fund worth Tk 1.0 billion from its own finance.
In the fiscal 2005-06, the WB channelled some $10 million under its Enterprise Growth and Bank Modernisation Project to the fund.
Later on, the total amount of SME Fund stood at Tk 3.70 billion as $30 million was provided by the Asian Development Bank (ADB).
However, the central bank Thursday asked eight government-owned banks and financial institutions to intensify disbursement of fresh farm loans along with rural credit to all sections of cyclone-affected people.
The instruction came at a special review meeting with the officials of the banks and financial institutions, held at the central bank with General Manager of the Agricultural Credit and Special Programme Department of the BB M Abdul Haque in the chair.
The meeting reviewed the overall agro-credit disbursement situation and asked the officials to ensure optimum disbursement in the cyclone-hit areas.
The central bank also directed the banks and financial institutions to take necessary measures to achieve the agro-credit disbursement target by the end of this fiscal.
The BB has already set the credit target at Tk 81.92 billion, which includes Tk 13.47 billion from private commercial banks and the rest from government-owned banks and financial institutions for disbursement among farmers across the country.
"We have asked the bankers to gear up the disbursement of farm credit to cyclone-affected areas to facilitate the ongoing rehabilitation programmes," another BB senior official said.
During the meeting, the BB officials laid emphasis on disbursement of agriculture loans rather than any recovery drive, particularly in the country's southern districts.
The central bank also asked the bankers to monitor the overall agro-credit position through their top-level officials to ensure proper disbursement of the farm credit.
The meeting also asked to disburse the agriculture loans along with rural credit in line with the existing poverty alleviation programme to help the cyclone-affected people.
A total of Tk 13.05 billion was disbursed during the July-October period of the current fiscal against Tk 13.06 billion disbursed in the corresponding period of the previous fiscal, according to the BB statistics.
The banks and financial institutions are: Sonali Bank Ltd, Janata Bank Ltd, Agrani Bank Ltd, Rupali Bank Ltd, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh Rural Development Board (BRDB), and Bangladesh Samabaya Bank Limited (BSBL).
The loans have been given to agro-based eight sub-sectors like crops, irrigation equipment, livestock, agricultural products marketing, fisheries and poverty alleviation.