Regulatory Alerts2008-05-26
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ACSPD Circular Letter No. 02: Extending loan to Small & Medium Enterprise (SME) sectors
The document advises banks and financial institutions to engage NGOs to assist in borrower selection, loan distribution, and recovery to reduce supervision costs for Small and Medium Enterprise (SME) lending. It extends the repayment period for medium-term industrial loans from three to four years, requiring repayment in seven equal semi-annual installments including interest, with a six-month moratorium from the loan date. These instructions supersede all previous directives on this matter and take immediate effect.
Bangladesh Bank Head Office P.O. Box No. 325 Dhaka Bangladesh www.bangladesh-bank.org.bd
Agricultural Credit & Special Programs Department (Industry Sub-Department)
Ref No.-ACSPD Circular Letter No. 02 Date 26/05/2008 AD
All Scheduled Banks and Financial Institutions of Bangladesh
Dear Sir,
Context of Extending Loans to Small & Medium Enterprise (SME) Sectors
Reference is invited to the subject cited above.
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In order to expand loans to the Small and Medium Enterprise sectors and to reduce the Supervision Cost of loan distribution and recovery by banks/financial institutions, it is advised to engage NGOs for assistance in borrower selection, loan distribution, and recovery.
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With the cancellation of all previously issued directives regarding the tenure of medium-term loans for medium-sized industrial factories, the tenure is now changed from 3 (three) years to 4 (four) years. Among the distributed loans, in the case of refinanced loans, it will be repayable with interest over 4 (four) years in 7 (seven) equal semi-annual installments, including a 6 (six) months moratorium period from the date of loan taking.
This circular will come into effect immediately.
Kindly acknowledge receipt.
Yours faithfully,
(Md. Abdul Haque) General Manager Phone: 7120947
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