SMESPD Circular Letter No. 10: Change in name and policy of “Refinance Scheme for Setting up Agro Based Product Processing Industries in Rural Areas”

Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh.

SMESPD Circular Letter No. 10 Date: 16 Ashwin, 1430 01 October, 2023

To, Managing Directors / Chief Executives All Scheduled Banks and Financial Institutions operating in Bangladesh

Subject: Change in name and policy of “Refinance Scheme for Setting up Agro Based Product Processing Industries in Rural Areas”.

Reference is invited to SMESPD Circular No. 02 dated 05 September 2019 and SMESPD Circular Letter No. 02 dated 07 May 2020.

2. In paragraph 11.1 of SMESPD Circular No. 02, the name of the “Refinance Scheme for Setting up Agro Based Product Processing Industries in Rural Areas” is changed to “Refinance Scheme for Agro Based Product Processing” and the instructions mentioned in the said paragraph are replaced as follows:

11.1 Refinance Scheme for Agro Based Product Processing

This scheme has been launched to encourage banks and financial institutions to establish agro-based product processing industries and provide related support services in rural areas of the country, with the aim of creating employment opportunities and alleviating poverty. The sectors, areas, and refinance-eligible loan limits under this scheme are as follows:

a) The agro-based industry/service venture must be located outside the Dhaka and Chittagong City Corporation areas. In this regard, priority shall be given to entrepreneurs in rural areas when providing refinance facilities.

b) The type of industrial venture shall be determined based on the definitions of cottage, micro, small, and medium industries mentioned in paragraph 2.1 of the cited circular, as specified below:

Type of Industrial Venture	Sub-sector	Criteria for Determining Type of Industrial Venture
Cottage Industry	Production Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: Below 10 Lakh Taka.<br>Number of personnel employed/working in the industrial establishment: Formed by family members and other members, but not more than 15 persons.
Micro Industry	Production Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: From 10 Lakh Taka to below 75 Lakh Taka.<br>Number of personnel employed/working in the industrial establishment: From 16 to 30 persons or less.
	Service Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: Below 10 Lakh Taka.<br>Number of personnel employed/working in the industrial establishment: Maximum 15 persons.
Small Industry	Production Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: From 75 Lakh Taka to below 15 Crore Taka.<br>Number of personnel employed/working in the industrial establishment: From 31 to 120 persons.
	Service Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: From 10 Lakh Taka to below 2 Crore Taka.<br>Number of personnel employed/working in the industrial establishment: From 16 to 50 persons.
Medium Industry	Production Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: More than 15 Crore Taka but not more than 50 Crore Taka.<br>Number of personnel employed/working in the industrial establishment: From 121 to 300 persons; however, for ready-made garment industry/labor-intensive industries, maximum 1000 persons.
	Service Industry	Total value of fixed assets of the industrial establishment including replacement cost, excluding land and factory building: From 2 Crore Taka to 30 Crore Taka.<br>Number of personnel employed/working in the industrial establishment: From 51 to 120 persons.

c) The industry must be included in one or more agro-based industry sectors mentioned in Annexure-11 of SMESPD Circular No. 2/2019. However, refinance facilities may be provided for other suitable industries related to this outside the list, subject to the prior approval of the Small and Medium Enterprises and Special Programs Department (SMESPD). In this regard, the decision of SMESPD shall be final.

d) The loan eligibility limit of the industrial venture shall be determined as follows, in accordance with the maximum sector-based loan limits provided in favor of cottage, micro, small, and medium enterprises mentioned in paragraph 2.6 of SMESPD Circular No. 2/2019:

Loan Limit	Cottage Enterprise	Micro Enterprise	Small Enterprise	Medium Enterprise
Production Industry	15 Lakh Taka	1 Crore Taka	20 Crore Taka	75 Crore Taka
Service Industry	25 Lakh Taka	5 Crore Taka	5 Crore Taka	50 Crore Taka
Business Enterprise	50 Lakh Taka	5 Crore Taka

3. Currently, the amount of the refinance fund under this scheme is 1400 Crore Taka.

4. Under the said fund, the interest rate for customers is fixed at a maximum of 07 (seven) percent, and the refinance rate for banks/financial institutions is fixed at 02 (two) percent.

5. In addition, all other instructions mentioned in the aforementioned circular and circular letter shall remain unchanged.

6. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991, and Section 18 of the Financial Institutions Act, 1993, and shall take effect immediately.

Yours faithfully,

(Mohammad Ashiqur Rahman) Director (SMESPD) Phone: 9530502