BB sets SME loan disbursement target at Tk 1.13t for 2016

The central bank has set the target of small and medium enterprise (SME) credit disbursement at Tk 1.13 trillion for this calendar year, up by 8.53 per cent than that of the previous year, officials said Thursday.
Of the total, six state-owned commercial banks (SoCBs) and two specialised banks will disburse Tk 142.49 billion in 2016, according to the central bank's latest statistics.
Thirty-nine private commercial banks (PCBs) will distribute Tk 917.80 billion while nine foreign commercial banks (FCBs) will lend Tk 20.16 billion to the entrepreneurs.
Besides, 31 non-banking financial institutions (NBFIs) have made commitment to disburse Tk 54.59 billion as SME loans in the current calendar year.
The loans will be given to more than 60 SME sectors such as light engineering, handicraft, flower, fish processing, handloom, rice mill, jamdani, Rajshahi silk, khadi, biogas and compost fertiliser.
The Bangladesh Bank (BB) has fixed the target based on information provided by 56 scheduled banks and NBFIs, according to the central bank officials.
"We expect that the target of SME loan disbursement will be achieved by the end of this calendar year," Nirmal Chandra Bhakta, executive director of the BB, told the FE.
He also said the central bank will strengthen its monitoring and supervision further to ensure the quality of SME loans across the country.
Currently, the central bank is following a three-tier monitoring system to ensure growth in the country's SME sector.
Under the monitoring system, the BB headquarters, its ten branch offices across the country and head offices of all commercial banks are reviewing the implementation of SME credit programmes regularly.
The central bank of Bangladesh has also introduced a new monitoring system using mobile phone to ensure proper utilisation of SME loans.
 "We're working to achieve sustainable development through boosting financing in productive sector including SME," Mr Bhakta said while announcing the target at the BB's headquarters in Dhaka on the day.
He also said the central bank has taken initiatives to reduce the amount of non-performing loan in the SME sector by gearing up recovery drives across the country.
"We expect that interest rates on SME loan will come down at single-digit level within the next calendar year," Swapan Kumar Roy, general manager of the SME and Special Programmes Department of the central bank, said while replying to a query.
Mr Roy also said the central bank has already issued a directive in this regard.
Meanwhile, the disbursement of SME loan crossed the target in the last calendar year as the central bank has strengthened its monitoring and supervision to the lenders.
All banks and NBFIs achieved 110.79 per cent of their annual SME loan disbursement target, which was fixed at Tk 1.04 trillion for the last calendar year.
The banks and NBFIs disbursed Tk 1.16 trillion as SME loan in 2015, the BB data showed.
However, three Islamic banks disbursed maximum amount of SME loan in 2015 while three FCBs lent minimum amount of such loan, according to the central bank report.
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