SME June 13,(V7N)- The Small and Medium Enterprise (SME) Foundation is set to provide an additional Tk 450 crore in loans to cottage, micro, small, and medium enterprises (CMSMEs) through a government stimulus package and its own resources to assist with challenges stemming from the COVID-19 pandemic.

These funds will be offered at a low interest rate of 6%, significantly below the current bank rate of over 13%, to help small and medium enterprises struggling to access financing for business expansion.

Under the initiative, small and medium entrepreneurs can obtain loans ranging from a minimum of Tk 1 lakh to a maximum of Tk 25 lakh. For capital machinery purchases, the loan limit is set at Tk 50 lakh. Loans up to Tk 10 lakh will be available without requiring collateral.

The loans will be distributed through 19 private and state-owned banks and four non-bank financial institutions, with a repayment period of 48 months, including a six-month grace period.

The foundation signed agreements with 23 banks and financial institutions at an event in the capital, attended by representatives from Sonali Bank, Bangladesh Agricultural Bank, Rajshahi Krishi Unnayan Bank, Karmasangsthan Bank, BRAC Bank, Bank Asia, Dhaka Bank, Eastern Bank, Mutual Trust Bank, NRB Commercial Bank, Mercantile Bank, Prime Bank, Premier Bank, City Bank, Southeast Bank, Shahjalal Islami Bank, Bengal Commercial Bank, United Commercial Bank, Trust Bank, IDLC Finance, IPDC Finance, LankaBangla Finance, and United Finance.

Salahuddin Mahmud, the SME Foundation’s managing director (additional charge), along with the CEOs of the partner banks and financial institutions, signed the agreements. Senior Industries Secretary Zakia Sultana and Financial Institutions Division Secretary Md Abdur Rahman Khan were among the attendees, with the SME Foundation Chairman Professor Md Masudur Rahman presiding over the ceremony. General Manager Nazim Hasan Sattar provided a detailed explanation of the loan distribution policy.

According to the SME Foundation’s plan, 30% of the loan fund will be allocated to female entrepreneurs, with the remaining 70% going to male entrepreneurs. Additionally, 10% of the loans from both categories are earmarked for SME Foundation cluster entrepreneurs. Of the loans to women, 50% will support the manufacturing and service sectors, while the other 50% will go to the value chain and other sectors. For male entrepreneurs, 50% will be allocated to manufacturing, 25% to the service sector, and 25% to the value chain and other sectors.

The foundation will not provide loans to non-productive sectors such as grocery stores, drug dealers, hardware dealers, or businesses that cause environmental pollution.

Priority will be given to key SME sub-sectors, cluster entrepreneurs, and value chain participants, including those manufacturing exportable goods, producing import substitutes, and those involved in ICT and technology-based creative industries who have not yet secured loans from banks. Entrepreneurs in underdeveloped and tribal regions, as well as physically challenged individuals and third-gender entrepreneurs, will also receive priority.

Previously, the SME Foundation disbursed Taka 300 crore in loans to small and medium entrepreneurs as part of the government's efforts to mitigate the adverse effects of the coronavirus pandemic.

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