DCCI requests for increased credit flow to the CMSMEs

Dhaka Chamber of Commerce and Industry (DCCI) on Tuesday called upon the authorities concerned to increase credit flow to the Cottage, Micro, Small and Medium Enterprises (CMSMEs).

The chamber made the call when the Board of Directors of DCCI led by its President Ashraf Ahmed met Bangladesh Bank (BB) Governor Dr Ahsan H. Mansur at the bank’s headquarters here, a BB press release said, reports BSS.

During the meeting, Dr. Ahsan H. Mansur said if the existing inflation can be brought down to a tolerable level within the next 6-7 months, reduction of policy interest rate and other interest rates will be possible.

In this connection, he said deposit collection in the banking sector is crucial now and its growth should be reached to double digit. The Governor emphasized on making credit guarantee facilities for SMEs more operational.

He also emphasized on the need of limiting the rate of government borrowing to increase the flow of credit to the private sector. Improving payment history and credibility will help getting foreign trade credit for the entrepreneurs, he added.

The Governor also said that a banking commission will be formed soon, based on which the necessary roadmap will be formulated to bring stability to the financial sector.

He further advised new investors to invest in special economic zones to get all facilities together.

In his speech, Ashraf Ahmed said that if the interest rate increases, that may slow down the flow of credit, especially for CMSMEs.

“In terms of SME financing, Bangladesh Bank has several schemes, which can be accelerated to facilitate the financing process for this sector,” he added.

Dhaka Chamber president also requested for facilitating foreign trade credit processing, foreign loan processing and increasing credit flow to the banks.

Above all, he requested the central bank to take initiative on reducing of pressure of interest rates on loans to CMSMEs.

He requested the Bangladesh Bank not to continue this policy for a prolonged period and start reducing rates as soon as practicable.

Emphasizing the need for keeping inflation under control, Ashraf Ahmed pointed out that inflation not only increases the cost of common people but also it increases the operational costs of businesses.

About bad loans, he said if the bad loans of the banks come down, the lending interest rate can also be decreased subsequently. He welcomed the central bank's initiative to bring stability to country's financial sector.

The Dhaka Chamber President said that for the development of the CMSME sector, assistance is required to deal with the pressure of interest rate increase and maintain the flow of credit.

Deputy Governors of Bangladesh Bank Nurun Nahar and Dr. Md. Habibur Rahman, DCCI Senior Vice President Malik Talha Ismail Bari, Vice President Md. Junaed Ibna Ali and members of the board were also present during the meeting.