Bangladesh Sangbad Sangstha . Dhaka

The banking sector has strongly been advised again to increase their credit flow to support small and medium enterprises, or SMEs, and women entrepreneurs, which have long been seen vital to economic growth. Inaugurating a workshop on ‘The Role of the Policy Makers and Central Banks in Promoting SMEs’ Access to Finance — The Case of Bangladesh’ in the capital city, Bangladesh Bank governor Atiur Rahman said banks should be more enthusiastic in promoting SMEs and women entrepreneurship. Bangladesh Institute of Bank Management in association with European Union and Bangladesh Inspired Project of Ministry of Industries organised the workshop at BIBM in Dhaka. BIBM director general Taufiq Ahmed Chowdhury chaired the inaugural session. ‘We (bankers) offer lot of things to bigger entrepreneurs. Let’s do something for small ones’, the governor said. He suggested providing SMEs and women entrepreneurs both financial and advisory assistance to ensure better use of loan and its timely recovery. Atiur said the present government had rightly identified SMEs as the priority sector for transforming Bangladesh into a middle-income country by 2021. In line with the government’s thrust, he said BB had been instrumental in designing and implementing SME sector development initiatives as part of its development financing agenda, with broadening financial access to cottage, micro and small enterprises and in particular women entrepreneurs. He said the BB had already become the role model in SME financing in the international arena within a span of only five years. Its initiatives are being studied by other central banks of the world, Atiur added. The governor said a number of soft credit schemes are available through BB for financial institutions for lending to SMEs at a capped interest rate. For women entrepreneurs, he said, policy intervention including earmarking of 15 per cent low-cost fund for women entrepreneurs, clean lending limits up to 25 lakh, priority in loan processing, engagement of women business chambers and associations in client sourcing, mentoring and capacity building support are being encouraged. The governor, however, said that there was still a long way to go before financial inclusion could be characterised as fully satisfactory. ‘In many cases, SME lending by banks is not profitable due to the lack of appropriate processes and low technological level. If the lending is not profitable, the banks will not proactively increase portfolio in the micro and small and medium entrepreneurs segment’, Atiur said. The governor suggested that banks should revisit their MSME banking model to identify pitfalls and undertake business process reengineering to make MSME banking profitable, less risky, and more consumers’ friendly.

News:New Age/12-Apr-2015