Classification and provisioning rules will be relaxed for loans going to small and medium enterprises in order to encourage banks to lend more to SMEs.
“The SME loan rules will be relaxed in favour of banks but the share of the loan in the manufacturing sector will have to be higher than those in the trading and other sectors,” said Bangladesh Bank Governor Fazle Kabir yesterday.
He made the announcement while addressing the inaugural session of “Banker-SME Women Entrepreneurs Gathering and Product Showcasing Fair-2018” at the Bangladesh Shishu Academy.
The SME & Special Programmes Department of the central bank organised the three-day fair. Speaker of parliament Shirin Sharmin Chaudhury opened the event.
Currently, banks have to maintain a provision of 0.25 percent against SME loans whereas it is 1 percent for other sectors.
At present, 20 percent of all bank loans are supposed to go to SMEs, and the BB will raise it to 25 percent by 2025, said Kabir.
Of the 25 percent SME loan, a minimum 10 percent will have to go to women entrepreneurs, he said.
The total SME loan in the banking sector stood at Tk 744,102 crore as of September last year. Women borrowers got only 3.5 percent of the loans.
“There is an allegation that women entrepreneurs don't get support from banks due to a lack of confidence,” the governor said.
Kabir asked banks to encourage branch managers to provide loans to women entrepreneurs.
“Bank managers will have to keep confidence in female entrepreneurs and guide them,” said the governor.
Speaker Shirin Sharmin Chaudhury echoed Kabir, saying banks would have to extend loan facilities to women entrepreneurs.
She said the collateral-free loan up to Tk 10 lakh is a very effective product to support women entrepreneurs in taking loans, but there is no promotion of the product. As a result, many female borrowers are not aware of it, Chaudhury said.
Shaikh Md Salim, a general manager of the central bank, asked banks to take necessary steps so that female clients don't face any harassment in getting loans.
At the event, 25 banks disbursed about Tk 14 crore in loans to SME entrepreneurs.
IPDC, a non-bank financial institution, launched a new product named “Joyi” for women entrepreneurs who can take loans at an 8 percent interest rate.
Md Abdur Rahim, an executive director of the BB, also spoke.