Govt sits today to bring pace in loan disbursement to virus-hit SMEs

The government is expected to sit today (Sunday) with the concerned agencies to ensure speedy disbursement of stimulus funds to the country’s Covid-19 pandemic-affected small businesses.

The move comes following the low rate of loan disbursement under the packages to the cottage, micro, small and medium enterprises.

The Finance Division has called an inter-ministerial meeting today to implement the stimulus packages at a faster pace, according to the letters sent to the concerned public agencies.

Banks are reluctant to disburse funds to the SME entrepreneurs involved in trade and service sectors. “Because the package does not include the SME entrepreneurs engaged in trades and services,” said NRBC Bank Managing Director Md Mukhter Hossain.

Last week, the Finance Ministry organised a two-week-long dialogue on stimulus packages for sustainable and inclusive recovery from the Covid-19 fallout.

The government also plans to roll out more financial incentives for the businesses suffered from the second wave of the pandemic.

During the dialogue, Senior Finance Secretary Abdur Rouf Talukder said, "We are discussing the new package for the SMEs. Because of the second wave, there is a risk of slow recovery. We’re thinking of seeking support from the development partners.”

According to the Bangladesh Bank (BB), the banks disbursed only Tk206 crore to SMEs whereas SME entrepreneurs have applied for loans worth Tk 518 crore last July.

On April 13, the central bank issued a circular announcing an incentive package of Tk20,000 crore to ensure working capital supply to SMEs affected by Covid-19. The government is providing subsidies of 5 percent of the 9 percent interest on SME loans. The remaining 4 percent is now paid by the borrower.

The Finance Division and the BB have so far announced 21 stimulus packages worth $14.28 billion, which is 4.34 percent of the GDP.