Bangladesh Bank Governor Atiur Rahman urged the banks to divert their investment focus to the creation of new entrepreneurs providing small loans to them.

He also said the SMEs have demonstrated more commitment in repayment of loans than the big entrepreneurs.

“Banks are to face crisis sometimes by providing loan to big entrepreneurs but SMEs (small and medium entrepreneurs) would be more committed in this case,” he said while addressing a signing ceremony of “New Entrepreneurs Refinance Scheme” at Bangladesh Bank headquarters yesterday.

The central bank signed a participatory contract with 32 commercial banks and financial institutions under its refinance fund of Tk100 crore for the development of new entrepreneurs.

The fund will be used for providing highest loan of Tk10 lakh without collateral and Tk25 lakh with collateral at 10% interest rate to a new entrepreneur aged 18 to 45 years who did not take any loan earlier.

The refinance scheme will be implemented through the country’s banks and financial institutions.

Earlier, Dhaka Chamber of Commerce and Industry had taken an initiative to promote 2,000 new entrepreneurs.

In order to expose these entrepreneurs to the local and global arena, DCCI had taken a mega expo titled “DCCI Entrepreneurship and Innovation Expo” held in November last year.

The refinance scheme is the outcome of that initiative for creating new entrepreneurs taken by DCCI, said governor.

“We have many projects for financing the SME sector but this refinance project is most important as the fund will go to the new generation of our country,” he said.

He expressed hope that the fund of Tk100 crore would be increased following the approval of central bank board if the outcome of using the fund is good.

“There is no funding problem, but important is how many entrepreneurs we are creating.”

Dr Atiur Rahman called the banks to keep their commitment in disbursing the fund properly.

Governor directed Bangladesh Bank officials to ensure the timely disbursement of the fund.

DCCI President Shahjahan Khan and Former President Sabur Khan were also present, among others, at the function.

Shahjahan Khan said: “Despite the contract is being signed, the main objectives are not achieved.”

He urged the banks to come forward to achieve the goal of creating new entrepreneurs using the fund properly.

Masum Patwary, General Manager of SME and Special Programmes Department of Bangladesh Bank, alleged the banks showed interest to sign such contracts but after signing they didn’t participate actively in the SME loan disbursement. 

Ali Reza Iftekhar, President of Association of Bankers Bangladesh (ABB),  denied the allegation and said the banks always achieved successfully the targets set by Bangladesh Bank in all projects including in agriculture and SME sectors.

Selim R.F Hussain, Managing Director of IDLC Finance, assured on behalf of all banks and financial institutions that they would be committed about the proper use of the fund.

Helal Ahmed Chowdhury, Managing Director of Pubali Bank, expected the size of the fund would be increased in future if properly used. The fund will have an important role on employment generation, he hoped.