Leaders of the Small and Medium Enterprise (SME) sector on Tuesday slammed the government for its decision to disburse the fund of a refinancing schemes for SMEs through private banks as they charge high interest on credit.

Though the government is giving the fund for refinancing at lower interest, they are charging higher interest in the name of operating charges, the entrepreneurs alleged.

“The government is handing over people’s money to the institutions of the riches,” the sector leaders said, pointing finger at the private banks.

The SME sector leaders were speaking at a discussion on the SME financing project, funded by the Japan International Cooperation Agency (JICA), at SME foundation’s office in the city. Under the Jica scheme, Bangladesh Bank (BB) earlier opened a Tk 4.5 billion fund to provide financing facilities to the country’s small and medium enterprises.

Under the two-step fund, provided by JICA, 39 banks and financial institutions (FIs) will be provided with re-finance or pre-finance for lending to SMEs. BB signed separate agreements with 39 participatory banks and FIs to this effect.

During the function, SME Foundation managing director Khurshid Alam repented that the central bank was not taking any effective measure to lower the interest rates.

“For disbursing the Jica’s loan, the government did not pick up state-owned banks. Because, state banks have been set aside for institutions like Hallmark,” remarked Raju Ahmed, president of Agro Processor Association.

Another SME sector leader Mosharraf Bhuiyan alleged that the private banks were charging 15 to 18 percent interest from small entrepreneurs after getting the fund from the central bank at an interest of five percent.

News: The Daily Sun/Bangladesh/3rd-Oct-12