Bangladesh Bank has introduced a Tk 5,000 crore refinancing fund aimed at providing working capital loans to small and medium enterprises (SMEs) at a maximum interest rate of 9%. This initiative, named the 'CMSME Sector Working Capital Refinancing Fund,' is designed to enhance business operations and employment in the SME sector. The fund will be operational for an initial period of three years. Banks will receive funds from this scheme at a 4% interest rate. The primary objective is to ensure that active CMSME institutions receive the necessary working capital to operate at full capacity. Banks will be responsible for loan recovery, and they may require collateral or co-surety from borrowers to mitigate risk. Defaulters will not be eligible for this fund. Borrowers will also receive a grace period of 3 to 6 months before starting loan repayments. Banks with a loan-to-deposit ratio above 70% will be given priority for accessing this fund, provided they do not exceed the maximum loan-to-deposit ratio set by Bangladesh Bank.
Key Features of the Fund
- Maximum interest rate for borrowers: 9% - Interest rate for banks: 4% - Initial fund duration: 3 years - Priority for banks with loan-to-deposit ratio above 70% - Grace period for borrowers: 3 to 6 months - Defaulters ineligible for the fund - Banks responsible for loan recovery - Possible requirement of collateral or co-surety
