Eastern Bank Ltd. (EBL) has come up with a lending proposal for the small and medium leather product manufacturers to reduce the financial constraint of the sector. To this end, a bilateral loan agreement of Tk 10 million between EBL and Small and Medium Enterprise Foundation (SMEF) was signed at a city hotel on Sunday.

At the signing ceremony, EBL launched a loan project, EBL-Udoy, with a single digit rate of interest for leather goods manufacturing clusters in Dhaka. 

Syed Rezwanul Kabir, managing director of SMEF, and Ali Reza Iftekhar, managing director and chief executive officer of EBL, signed the loan agreement. Industries minister Dilip Barua attended the event as chief guest where governor of Bangladesh Bank Dr Atiur Rahman was also present as special guest. Under the loan agreement, SME Foundation disbursed Tk 10 million to EBL at 4 per cent interest rate.EBL, in association with USAID-Price and Aarong, will disburse Tk 10 million with 9 per cent rate of interest to nearly 23 small and medium leather goods manufacturers.

Terming access to finance as a major roadblock to the SME sector, Dilip Barua said many potential SMEs  cannot move ahead due to poor access to bank finance.“It is deplorable that the banking and financial sectors feel more comfort in disbursing loan to the industrial sector than the SME sector,” he said. Industrial economy is essential instead of trading economy for creating employment opportunity, economic growth and better livelihood, he said.

The flourishing of SME sector would help in inflating industrial productivity, foreign investment and employment opportunity as well as strengthening the economic activities, the minister said.“SME sector is a wheel of economic growth and working as a catalyst of poverty alleviation,” the central bank governor said.

Source: The Independent/ Bangladesh/ 21th Nov 2011