SMEs
Small & Medium Enterprise (SMEs) sector is the engine of any growing economy like Bangladesh. When the country is suffering from scarcity of investment, entrepreneurs of the SMEs are showing their full enthusiasm to invest more, though they are facing hurdles due to the fact that the commercial banks and non-bank financial institutions (NBFIs) charge high interest rate on loans.
In many cases, effective interest goes beyond 18 percent. Private banks and non-bank financial institutions (NBFIs) are charging 15 to 20 percent while state owned commercial banks' rate ranges between 12 to 13 percent. Though Bangladesh Bank facilitates refinancing scheme at 5% rate of interest, banks and non-bank financial institutions are imprudently charging such high rate.
Of course, the supervision cost of SME loans is high but that leaves no excuse for banks since they are giving agricultural loans at a lower rate, which have the similar supervision cost. Because of the jittery mood of the businessmen in the last few years, especially during the caretaker government, the banks are now piled up with idle money amounting about 30,000 crore taka. The banks can make use of this money facilitating the SME sector, which will grow our export potential next to garments.
The SME foundation is considering setting up an industrial park at Keraniganj for light engineering, plastic and electronic factories. For this, SME foundation has signed an MoU with the International Finance Corporation (IFC), an organ of the UN. In spite of the positive steps taken by various organisations including the government SME, the thrust sector, will not flourish at the favoured speed unless the banks slash the interest rate to the minimum level.
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