Loan disbursement among SMEs marks phenomenal rise in 2013

Disbursement of loans for small and medium enterprises (SMEs) marked a phenomenal rise in all sectors in 2013.
Such an increase has been attributed mainly to entrance of new entrepreneurs and ventures following combined efforts of the central bank and the financial institutions.
According to the Bangladesh Bank, loan amounting of Tk 853.23 billion was distributed among 744,228 SME entrepreneurs during the calendar year 2013. This was 116 per cent more than the target fixed for the year.
The central bank fixed the target of SME loan distribution for 2013 at Tk 741.87 billion.
"Despite having political turmoil almost throughout the year, the disbursement of SME loan made a phenomenal growth. This was possible because many entrepreneurs put their investment in small sectors following some adverse effects on overall trade and investment," said Md Masum Patwary, general manager of SME and Special Programmes Department of the BB.
Besides, he said, the central bank doubled the SME loan fund for agro-sector to Tk 4.0 billion from Tk 2.00 billion amid increasing demand for SME loan from new entrepreneurs and new sectors.
The BB data shows that 65,504 new entrepreneurs received Tk 131.97 billion SME loan in the last calendar year which was Tk 48.35 billion in the previous corresponding year. In 2012, the number of new entrepreneurs was 26,687.
"Increase of both new entrepreneurs and total amount of disbursement of SME loan in 2013 compared to those of 2012 were 145 per cent and 173 per cent respectively," said another official.
According to the available data, Tk 443.12 billion was disbursed among small enterprises in 2013 which was Tk 64 billion more than the disbursement in 2012. The Bangladesh Bank fixed 40 per cent of the SME loan for small enterprises.
Besides, the SME loan disbursement in manufacturing sector in 2013 also increased to Tk 240.16 billion which was Tk 21.19 billion more than that of 2012 while disbursement in service sector was Tk 46.02 billion, Tk 9.71 billion more from what it was in 2012.
Sources said due to political disturbance in the last calendar year, many enterprises used the SME loan for trading sector leading to increase in the SME loan to Tk 567.03 billion.
Due to success in SME loan distribution in 2013, the Bangladesh Bank has increased the target for the current year to Tk 887.53 billion aiming at bringing all 75 bank and non-banking financial institutions under the SME credit portfolio.
The SME general manager said at present, the central bank has agreement with 47 banks and NBFIs to disburse the SME loans which will be increased targeting all banks and NBFIs.
He also said it is also being planned to disburse SME loan among small enterprises targeting publishers, new women entrepreneurs, students and rural areas to meet the target of 2014.
The general manager said the Bangladesh Bank has continued its efforts to popularise SME loans making efforts to identify entrepreneurs facing deprivation. He said 52 clusters were identified to disburse SME loans among new entrepreneurs apart from efforts to create new entrepreneurs through the Dhaka Chamber of Commerce and Industry.