SMEDP-2 Circular Letter No. 01: Reduction of Interest Rate under Second Small and Medium Sized Enterprise Development Project (SMEDP2)

08 Agrahayan 1427 23 November 2020 SMEDP-2 Circular Letter No. 01 Date: To Managing Director/Chief Executive Officer All Scheduled Banks and Financial Institutions.

Dear Sir,

Regarding the Revolving Fund established for the development of the Cottage, Micro, Small, and Medium Industries sector.

Reference is drawn to your attention to AFID Circular No. 01/2017 issued on 15 November 2017 on the above subject.

2. In order to maintain the capacity of Cottage, Micro, Small, and Medium Industries (CMSME) entrepreneurs affected by the outbreak of Novel Coronavirus (COVID-19) and to increase financial inclusion, the Government of the People's Republic of Bangladesh and the Asian Development Bank (ADB) have jointly authorized the operation of the Revolving Fund titled "Second Small and Medium Sized Enterprise Development Project (SMEDP-2)". In this regard, the following decisions have been taken to increase the flow of term loans alongside working capital loans in the CMSME sector:

a) The interest rate for participating banks and financial institutions under this fund is redefined at 02 (two) percent, and the maximum rate for customers is set at 06 (six) percent; and

b) The redefined interest rate will be operational from 18 November 2020 for all loans under this fund.

3. All other guidelines related to this matter will remain unchanged.

4. This directive is issued with the approval of the competent authority.

Yours faithfully,

(Md. Rezaul Karim Sarkar) Deputy General Manager and Deputy Project Director, SMEDP-2 Phone: 9530751

Bangladesh Bank Head Office Dhaka.

DnNo: B: 10.10.0000.000.00.000.20.102 Second Small and Medium Sized Enterprise Development Project (SMEDP-2)