Push for enhanced support for CMSME financing

The central bank's key focus is to control both the imports and inflation and promote local production for generating employment and for this it has announced new Credit Guarantee Scheme (CGS) on Refinancing against Term Loan of Tk 250 billion of which 75 per cent for cottage, micro and small enterprises and the remaining for medium enterprises.

Deputy Governor of Bangladesh Bank Abu Farah Md Nasser said this at the 10th Financial Sector Development Working Committee (FSDWC) meeting organised by the Business Initiative Leading Development (BUILD) on Wednesday.

Deputy Governor Abu Farah Md Nasser and President of Dhaka Chamber of Commerce and Industry (DCCI) Rizwan Rahman co-chaired the meeting, says a press release.

Md Nasser said open interest cap will pile yet more stress on small-business owners struggling with debt and will add more cost to production, thereby highly influencing the cost of business.

Bangladesh Bank is trying to combat inflation and at the same time ensure employment generation where cottage, micro, small and medium enterprises (CMSMEs) play a vital role, he added.

DCCI President Rizwan Rahman said women entrepreneurs should be aware of all policy changes of the regulators and the women chambers should shoulder responsibilities to come forward in educating their members with all existing regulatory benefits they can avail.

"We need to change our focus from collateral-based finance to cash flow-based finance which the central bank is doing now," he added.

BUILD CEO Ferdaus Ara Begum gave two presentations on the studies titled 'Constraints of Availing Financial Support of Women Entrepreneurs' and 'Overseas Equity Investment Rules 2022'.

The studies covered four refinancing schemes and four financial schemes by Bangladesh Bank. It also analysed several schemes by banks and financial institutions in collaboration with Fintech firms. The studies also covered several CGS facilities announced by the central bank.

Ferdaus Ara urged the central bank to enhance supports for the CMSMEs affected by Covid-19 pandemic with collateral/individual collateral or third party collateral or social collateral since they do not have assets for collaterals.

She also said that under the CMSME Loan Categorization of Bangladesh Bank, trading and some non-traditional sectors came up so that the financial institutions can fund them. Now, they cannot avail funds since they are not under CMSME Loan Categorization.