Banks asked to scale up SME loan

FE Report Industries Minister Dilip Barua Sunday urged the banks and financial institutions to increase the volume of loan to SME sector as finance poses big obstacle to it. He said the small and medium entrepreneurs get frustrated due to non-availability of loan as per their demand and the complicated procedure of getting loan. He said this as chief guest at the memorandum of understanding signing ceremony between SME Foundation and Eastern Bank to finance Tk 10 million to help boost production by the entrepreneurs of leather cluster of Mirpur. SME Foundation managing director Syed Rezwanul Kabir and EBL managing director and Chief Executive Officer Ali Reza Iftekhar signed the MoU on behalf of their organisations under SME Foundation credit wholesaling programme. Bangladesh Bank governor Dr Aitur Rahman was present as special guest at the singing ceremony. Industries Minister Dilip Barua said expansion of SME sector would industrial production. "For this reason we need finance first and after that we need training of entrepreneurs, market facilities, infrastructure and research," he added. EBL will provide SME loan for developing leather cluster of Dhaka area at 9 per cent interest. The enterprenuers will be able to take collateral free loan from Tk 100,000 to Tk 1.0 million. The loan to be repaid in equal monthly installments will have a tenure of 6 months to 36 months. Under the programme, the entrepreneurs will also get technical and skill development training from USAID Aarong will provide them with design and marketing facilities. Bangladesh Bank governor said, "Small and Medium Enterprises is the main growth engine of economy. So the banks and financial institutions should come forward to increase the investment on small and medium industry sector." He said: "Leather is a potential sector of the country. We have earned around $ 553 million by exporting leather and leather goods, which is the fourth largest export earning sector of the country." He urged the industries minister to increase the allocation to boost the SME sector. He said the country has 2500 small and medium industries in leather sector and 700,000 people are directly and indirectly involved in it. So expansion of this sector is related to economic and social benefits. SME sector is working as a weapon to reduce poverty in the country. The poverty rate of the country has been decreased by half. Twenty years back the rate of poverty was 60 per cent, but now it is 30 per cent, he added.