Experts for the correct use of the ‘Credit Guarantee Scheme’

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At a workshop on Saturday, experts called for appropriate use of the “credit guarantee scheme” to encourage lending to potential craft, micro, small and medium enterprises (CMSMEs).

Calling the CMSMEs “the engine of the country’s economy”, they urged banks and financial institutions to disburse more funds to marginal entrepreneurs so that they can bounce back from the pandemic shock.

The Dhaka Chamber of Commerce and Industry (DCCI) held the workshop titled “CSME Lending Issues and Opportunities” in its city auditorium, a DCCI press release said.

Deputy Governor of Bangladesh Bank (BB) Abu Farah Md Nasser addressed the event as the chief guest while Director of SME and Special Programs Department (SMESPD) of BB Md Jaker Hossain and SME Foundation Managing Director Md Nazeem Satter also spoke during the program chaired by DCCI President Rizwan Rahman.

In his speech, Bangladesh Bank Deputy Governor Md Nasser said that the central bank had set up a 20 billion taka fund for a credit guarantee scheme to provide loans without collateral, in particular to CMSMEs.

But of this amount, only 1.92 billion taka has been disbursed so far, which is disappointing, he said, adding that the proper use of this program is essential for the revival of CMSMEs.

He suggested that banks establish more sub-branches across the country rather than just focusing on banking agents to better reach CMSMEs locally.

On interest rates, the Deputy Governor said: “We are going through a difficult period due to the war between Ukraine and Russia. If we try to forcefully control interest rates right now, it could lead to a recession.

Given the global scenario, the manufacturing and service sectors should be given priority for loans at this time to control inflation, he also said.

DCCI Chairman Rizwan Rahman said that the CMSME sector plays an important role in the growth of the country’s economy, but due to lack of political support and financial assistance, the sector could not be fully utilized.

Mentioning that commercial banks and financial institutions sometimes feel risky to lend to MSMEs, he said: or Tk 147.46 billion was disbursed but most of it went to medium enterprises. »

Mr. Rahman urged regulators to give CMSMEs better access to information and communication technology as well as financial assistance so that they can achieve manufacturing capacity.

Ensuring access to information and adequate financing can help SMEs gain competitiveness in the supply chain process, he added.

The Managing Director of the SME Foundation, Md Nazeem Satter, said banks alone were not enough to guarantee loans to more than 7.8 million CMSMEs in the country.

He suggested capacity building of MFIs, NGO Foundation, Karmasangsthan Bank, BSCIC and SME Foundation to increase lending to these small businesses.

The central bank’s SMESPD Director, Md Jaker Hossain, said that the contribution of the CMSME sector to GDP is currently around 25%, and in 2024 it will be around 32%, while in 2027 , it will reach 40%.

He said Bangladesh Bank intends to disburse 50% of the total loans to CMSMEs, while at least 15% of the funds will go to women entrepreneurs in CMSMEs.

During the program, the Deputy Governor of BB also unveiled a DCCI brochure on “Easy Access to CMSME Funding”.

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