CGD Circular Letter No. 01: Credit Guarantee Facility against Term Loan to CMSME Sector under Tk. 25,000 Crore Refinance Scheme

Bangladesh Bank Chief Controller's Office Motijheel, Dhaka-1000 Bangladesh Ref No.: C.G.D.Circular.Letter.No.-01 Credit Guarantee Department CGD Circular Letter No.-01 November 22, 2022 Date: ----------------- 7 Agrahayan 1429

Managing Director / Chief Executive Officer All Scheduled Banks and Financial Institutions Operating in Bangladesh.

Dear Sir,

Regarding the provision of Credit Guarantee Facility under the Tk. 25,000 (Twenty-Five Thousand) Crore Refinance Scheme for the Cottage, Micro, Small and Medium Enterprise (CMSME) sector.

We draw your attention to CGD Circular Letter No. 02 dated August 10, 2022, regarding the subject matter above.

2. Through SMEASPDI Circular Letter No. 04 dated July 19, 2022, it was decided to provide a Credit Guarantee Facility against term loans to be disbursed under the Tk. 25,000 (Twenty-Five Thousand) Crore Refinance Scheme. Accordingly, guidelines on this matter were issued through CGD Circular Letter No. 02 dated August 10, 2022.

3. Recently, through SMEASPDI Circular Letter No. 07 dated November 8, 2022, instructions were provided stating that both term loans and working capital loans disbursed/payable in the Production, Service, and Business (PSB) sector will also be eligible for refinance. Furthermore, it was instructed in said circular letter that under the aforementioned Refinance Scheme, at least 65 (Sixty-Five) percent of the total loans shall be disbursed in the Production and Service sectors, and at most 35 (Thirty-Five) percent in the Business sector. However, Section 4.5 of CGD Circular Letter No. 02/2022 provides instructions regarding the customer-wise applicable loan limits for obtaining Credit Guarantee Facility only for CMSME enterprises in the productive and service sectors. Consequently, there is a need to incorporate the instructions provided through SMEASPDI Circular Letter No. 07/2022 into the guidelines related to the Credit Guarantee Facility.

4. Now, considering the current economic situation and the necessity of loans in the business sector, it has been decided to provide Credit Guarantee Facility against term loans as well as working capital loans and loans disbursed/payable in the business sector under CGD Circular Letter No. 02/2022. In this regard, Section 4.5 of CGD Circular Letter No. 02/2022 is hereby replaced as follows:

''4.5. Customer-wise Applicable Loan Limits for Obtaining Credit Guarantee Facility: The customer-wise applicable loan limits for CMSME enterprises in the sector eligible for the benefit are as follows: (a) For Cottage and Micro enterprises in the productive and service industrial sectors: Minimum BDT 25 (Twenty-Five) Thousand Taka to Maximum BDT 1 (One) Crore; (b) For Small enterprises in the productive industrial sector: Minimum BDT 1 (One) Lakh Taka to Maximum BDT 3 (Three) Crores, and in the service industrial sector: Minimum BDT 25 (Twenty-Five) Thousand Taka to Maximum BDT 1 (One) Crore; (c) For Medium enterprises in the productive industrial sector: Minimum BDT 1 (One) Lakh Taka to Maximum BDT 5 (Five) Crores, and in the service industrial sector: Minimum BDT 1 (One) Lakh Taka to Maximum BDT 2 (Two) Crores; and (d) For Micro enterprises in the business sector: Minimum BDT 25 (Twenty-Five) Thousand Taka to Maximum BDT 25 (Twenty-Five) Lakhs, and for Small enterprises in the business sector: Minimum BDT 25 (Twenty-Five) Thousand Taka to Maximum BDT 1 (One) Crore.''

5. Except for the aforementioned instructions, other instructions of CGD Circular Letter No. 02/2022 shall remain unchanged.

6. This instruction shall come into force immediately.

This instruction is issued under the powers conferred by Section 45 of the Bank Companies Act, 1991 and Section 18 of the Financial Institution Act, 1993.

Yours faithfully,

(Manoj Kumar Howlader) Director (CGD) Phone: 9530179