Sonia H Moni

The central bank is going to disburse a two- step loan fund for refinance or pre-finance under JICA assisted Financial Sector Project for the Development of Small and Medium Enterprises (FSPDSME), officials said.

"Japan International Cooperation Agency (JICA) will provide the fund worth Tk 4.15 billion for the development of SME sector including a technical assistance component," FSPDSME project director Sukamal Sinha Choudhury told the FE.

He said: "This fund will help boost the country's small and medium enterprises sector."

He said "Under the two- step loan fund, participating financial institutions will be provided with refinance or pre-finance for lending to SME sub-projects of productive investment for medium to long term duration."

Mr Choudhury, also General Manager of SME and Special Programme Department of the Bangladesh Bank (BB) said: "We invited applications from 47 banks and 31 non-banking financial institutions (NBFIs) for loan disbursement by March 27, 2012."

According to BB rules for eligibility for availing the fund, the banks and NBFIs have to comply with some of its conditions -- the institutions have to comply with anti-money laundering instructions, have to make profit for at least three consecutive years, classified loans of the institutions should be under 10 per cent.

Mr Choudhury said: "BB will disburse loans with five per cent interest to the banks and NBFIs and these financial institutions will provide loan to the entrepreneurs as per the interest rate rules of the central bank."

An operating guideline comprising policies and procedures of this fund has been developed for the banks and NBFIs. The central bank has requested the banks and NBFIs to review the operating guidelines. The fund will be governed by this operating guideline.

BB GM said: "We will scrutinise all the applications within a short time and if they fulfil the conditions they might get loan from next month."

Financial Express/Bangladesh/ 20th March 2012