More low-cost loans for women borrowers

Female borrowers would get at least 25 per cent of the stimulus fund dedicated to the farmers, underprivileged women, professionals, and micro-enterprises, said the central bank yesterday.

The Tk 3,000-crore fund was rolled out in April last year as part of the Bangladesh Bank's efforts to keep the micro-businesses afloat during the economic crisis brought on by the coronavirus pandemic.

Although a major portion of the stimulus fund has already been disbursed to women-owned businesses, the central bank has included the provision to emphasise lending to female entrepreneurs, a BB official said.

The instruction came into effect immediately, according to a notice of the BB yesterday. Microfinance institutions (MFIs) with certificates from the Microcredit Regulatory Authority can give out loans.

Under the package, the BB initially provides the fund to banks at 1 per cent interest. Banks lend to MFIs at 3.5 per cent interest.

MFIs usually charge about 25 per cent interest rate as their operational cost is high. But, they have to disburse the loans at 9 per cent under the stimulus package.

Banks have so far disbursed 63 per cent of the stimulus package through MFIs. Small businesses like roadside tea sellers can get loans. The highest amount of the loan would be Tk 75,000.

If more than five persons own the small businesses, the loan ceiling will go up to Tk 3 lakh. The repayment period is one year.

MFIs will be allowed to disburse loans ranging from Tk 10 lakh to Tk 30 lakh to micro-enterprises, and their repayment duration would be two years.