General

Stimulus package loan distribution deadline extended until March 31 for small enterprises

Bangladesh Bank has further extended the deadline until March 31 for the disbursement of loans under the government-announced stimulus package of Tk 20,000 crore for the Covid-19 affected cottage, micro, small and medium enterprise (CMSME) sector.

A central bank circular, issued on Sunday by SME and Special Programme Department, extended the deadline.

Earlier, the central bank issued a circular on April 13, 2020 asking the banks to distribute the special credit within October 31 to help CMSME investors recover their business from the Coronavirus affects.

But most of the banks were found to have failed to reach targets of loan distribution among the affected CMSME entrepreneurs within the stipulated time which promoted the Bangladesh Bank to further extend the time till December 31.

Again it was observed by the central bank that a good number of banks failed to distribute loans under the stimulus package though some banks were successful in achieving their respective targets.

“So, the new circular was issued to ensure that these banks would fulfill their targets in distribution of loans under the package by March 31”, said the Bangladesh Bank.

The BB also asked the failed banks to report to the SME and Special Programme Department of the central bank by January 17 with a monthly workplan to distribute the loans.

Bangladesh Bank study found that only 28.4 per cent of the loans for CMSME sectors were distributed until October 31 while banks have disbursed about 70.8 per cent of loans meant for large-scale industries.

The latest Bangladesh Bank data show that from the Tk 20,000-crore package for CMSMEs, banks have disbursed Tk 5,674 crore while they have so far disbursed Tk 28,313 crore from the Tk 40,000-crore packages meant for the large businesses and exporters.

Studies show that workers in the informal sector, especially in the CMSME sector, have been pushed into a difficult situation as many of them have lost their job and many more have faced a decline in income.

Source: United News of Bangladesh