Banks disburse Tk 185b in working capital loans

Deputy Governor of Bangladesh Bank (BB) Ahmed Jamal on Tuesday said the banks have so far disbursed Tk 185 billion in working capital loans from the stimulus package meant for large industries and the service sector.
He also said the governor of the central bank has asked all the banks to disburse the remaining amount within October next.
Mr. Jamal disclosed this at the eighth financial sector development meeting of the Business Initiatives Leading Development (BUILD), a public-private dialogue platform.
The BB deputy governor spoke as a co-chair of the event held on an online platform. Dhaka Chamber of Commerce and Industry (DCCI) President Shams Mahmud was another co-chair at the programme.
At the meeting, the BUILD proposed forming a 'credit guarantee scheme' (CGS) in the country to efficiently manage the credit guarantees.
A credit guarantee scheme provides third-party credit risk mitigation to lenders through the absorption of a portion of the lender's losses on the loans made to SMEs in case of default, typically in return for a fee.
A number of nations have already introduced such entities to support small businesses in the wake of Covid-19 pandemic, the BUILD said.
BUILD chairman Abul Kasem Khan suggested forming a small committee under the supervision of the central bank to establish such an entity that will ensure effective disbursement of loans.
He said the best practices of the world can be adopted as a model for the credit guarantee scheme.
Saiful Islam, president of the Leathergoods, and Footwear Manufactures and Exporters Association of Bangladesh, said businesses have to meet many stringent conditions to secure loans.
He also said the leather sector has been facing difficulties getting the loans.
Speaking at the event, Dr Swapan Kumar Bala, a former commissioner at the Bangladesh Securities and Exchange Commission, stressed the need for creating a suitable environment for the entrepreneurs so that they can have easy access to loans.
Nazim Sattar, a general manager at the SME Foundation, said the central bank may think of alternative channels to disburse loans, especially for the micro and cottage industries as they are not bankable.
Golam Rabbani, an assistant general manager at the BSCIC, said the Bangladesh Bank can issue a circular asking the banks at the district level to coordinate the disbursement of loans.
Ferdous Ara, CEO of the BUILD, presented a keynote paper at the meeting.
She said the cottage, micro, small and medium enterprises (CMSMEs) are passing through the worst situation due to coronavirus pandemic, compared to large enterprises.
She laid emphasis on ensuring that the CMSMEs have access to quick and hassle-free loans during these times of pandemic.
The BUILD is in favour of creating a database of the affected enterprises, she said and suggested conducting a census of the SMEs.

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