Access to loans must be made easier for farmers: analysts
Banks and the regulator should simplify the lending procedure to help farmers and small and medium entrepreneurs, analysts said yesterday.
A cluster system for the farmers and a guideline to ensure best use of the loan should be formed, they said at a workshop at The Daily Star Centre in Dhaka.
Bangladesh INSPIRED and Aurora, an NGO, jointly organised the workshop on the opportunities and challenges in access to finance for agro-based SMEs and farmers.
INSPIRED is the acronym for Integrated Support to Poverty and Inequality Reduction through Enterprise Development, the name of a programme funded by the Bangladesh government and the European Union.
Surveys are necessary to find out the SMEs that need loans the most, said Sushen Chandra Das, additional secretary of the industries ministry.
The government is going to upgrade the SME policy to increase facilities for SMEs, he said.
“There are procedural complexities in giving out loans. A farmer can't read brochures written in English, so they tend to avoid taking loans,” said Swapan Kumar Roy, general manager of Bangladesh Bank.
The loan ceiling without any collateral for female entrepreneurs set by the central bank is Tk 25 lakh, he said.
“But the women entrepreneurs cannot access the loans because of negligence of bank managers.”
Motivational classes should be organised for the bank managers in rural branches to change their mindset towards women entrepreneurs, Roy said.
Bangladesh needs to put emphasis on processed foods as the product has prospective markets, said Ali Sabet, team leader of Bangladesh INSPIRED.
It should be monitored whether the SMEs that need loans the most are getting those, said Khairul Kabir Menon, deputy secretary of the SME department of the industries ministry.
The number of defaulters is increasing because of handing over loans to the wrong SMEs, he said.
He suggested formulating a common platform comprising NGOs, banks and government organisations, which will give all-out support to farmers and SMEs.
“A cluster system must be developed to help farmers access loans.”
SMEs and farmers could not properly utilise the loans due to the absence of a guideline, said Ismat Jerin Khan, an entrepreneur and managing director of Jermatz Ltd.
Earlier, Md Quamruzzaman, CEO of Aurora, highlighted the facts of the “Agro-based SME cluster and value chain development” project funded by the European Union and Bangladesh government.