Bangladesh Government releases Tk 570cr to support small firms
The Bangladesh government has released Tk 570 crore from the Tk 1,500 crore stimulus package for disbursement to assist small traders, entrepreneurs, and farmers in surviving the ongoing pandemic.
The money will be disbursed among cottage, micro, and small enterprises to improve the living standards of marginalized people.
A total of Tk 1,500cr will be disbursed in two fiscal years.
The fund will be distributed by eight government and semi-government agencies this fiscal year, with the remainder distributed in the following fiscal year.
The new packages were approved by the Bangladesh government on January 17 to improve the living conditions of marginalized people living in rural areas.
The loans will be distributed in the form of grants to cottage, micro, and small enterprises (CMSE) in rural areas that did not previously have access to formal banking channels.
Borrowers can avail of the loan at 4 percent interest while the lenders will charge this interest as transaction costs.
Out of a total allocation of Tk 300 crore for two fiscal years, including 2021-22, the Bangladesh Rural Development Board received the highest allocation of Tk 150 crore for disbursement within 2020-21.
Tk 100 crore has been set aside for the Palli Daridro Bimochon Foundation, the Social Development Foundation, and the SME Foundation from the remaining funds.
Bangladesh Small and Cottage Industries Corporation (BSCIC) and Small Farmer Development Foundation will each receive Tk 50 crore, while the NGO Foundation and Joyeeta Foundation will each receive Tk 10 crore.
The package will provide funds to microbusinesses and farmers who have been unable to obtain loans from banks due to a lack of required documentation.
Borrowers will have to repay the loan within two years in 18 monthly installments with a grace period of six months.
To ensure convenience for potential borrowers from the package, which also aims to expedite Bangladesh’s recovery from the Covid-19 fallout, the disbursing agencies will need to develop a separate policy.
The grant is non-refundable, and lenders must deposit the total amount collected, including principal and interest, into a separate revolving fund.
Lending agencies are required to send soft copies of detailed expenditure statements for disbursements against a specific firm to the finance division. While disbursing the funds, the agencies must also follow all of the rules and regulations.
Mehjabin Zaman Mahee
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