Regulatory Alerts2020-05-07
Added · Updated
SMESPD Circular Letter No. 02: Amendments to Refinance Schemes for Small Enterprises, Agro-Based Industries, and New Entrepreneurs to Support CMSME
The document increases the corpus of three refinance schemes to 1,500 crore, 1,400 crore, and 100 crore Bangladeshi Taka respectively. It redefines interest rates, capping bank margins at 3% and customer rates at 7%. Additionally, it exempts state-owned and specialized banks from specific eligibility criteria in Circular 02/2019 and reduces the minimum business experience requirement for participating institutions to three years.
Bangladesh Bank Head Office Motijheel, Dhaka-1000 Bangladesh.
SMES & Special Programs Department SMESPD Circular Letter No. 02 Date: 24 Baisakh, 1427 07 May, 2020
Managing Director/Chief Executive Officer All Scheduled Banks and Financial Institutions operating in Bangladesh
Dear Sir,
Regarding the context of further facilitating the Refinance Scheme for Small Enterprise Sector, Refinance Scheme for Setting up Agro Based Product Processing Industries in Rural Areas, and Refinance Scheme for New Entrepreneurs in Cottage, Micro and Small Enterprise Sector.
Reference is drawn to your attention to SMESPD Circular No. 02 dated 05 September, 2019 on the relevant subject.
- In order to further accelerate and sustain the revival of the CMSME sector affected by the outbreak of the Corona Virus, and to ensure the proper flow of working capital along with medium-term loans/investments, the following decisions have been taken regarding the 03 (three) refinance schemes operated under the authorization of Bangladesh Bank:
a) Increasing the size of the Refinance Scheme for Small Enterprise Sector, Refinance Scheme for Setting up Agro Based Product Processing Industries in Rural Areas, and Refinance Scheme for New Entrepreneurs in Cottage, Micro and Small Enterprise Sector to 1,500 crore, 1,400 crore, and 100 crore Taka respectively;
b) Redefining the interest rate under the aforementioned three schemes to a margin of 03 (three) percent for banks/financial institutions and a maximum of 07 (seven) percent for customers; and
c) Regarding the participation of banks and financial institutions in obtaining refinance under these schemes, Clauses 1 and 2 of Paragraph 11.5 (j) of Circular 02/2019 shall not apply to State-owned Banks/Specialized Banks. Furthermore, Clause 5 of the same Paragraph (11.5(j)) has been relaxed to set the minimum business experience of participating institutions at 03 (three) years.
This decision will be implemented immediately.
Yours faithfully,
(Lila Rashid) General Manager Phone: 9530502