SMESPD Circular Letter No. 11: Regarding Redetermining of Loan Limit Under Credit Guarantee Scheme for Cottage, Micro and Small Enterprises (CMSE)

Ref: SME & Special Programs Department
CGS Unit
Bangladesh Bank
Head Office
Dhaka.

30 December 2021
SMESPD Circular Letter No. 11 Date: ------------------- 15 Poush 1428

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

Regarding Redetermining of Loan Limit Under Credit Guarantee Scheme for Cottage, Micro and Small Enterprises (CMSE).

Reference is drawn to your attention to SMESPD Circular No. 03 dated 27 July 2020 and Guidelines for Credit Guarantee Scheme for Cottage, Micro and Small Enterprises (CMSE).

2. In light of the outbreak of the Novel Coronavirus, to facilitate access to loan/investment facilities for entrepreneurs in the affected CMSE sector under the special loan/investment facility of 20,000 (Twenty Thousand) Crore Taka for working capital, a policy regarding Credit Guarantee facilities for the CMSE sector was issued through SMESPD Circular No. 03/2020. It is mentioned in Serial No. 1.6 of the said policy that the amount of loan/investment facility for guarantee under the said scheme shall be a minimum of 2 (Two) Lakh Taka and a maximum of 50 (Fifty) Lakh Taka. Furthermore, in view of the circumstances, instructions regarding the redetermination of future loan/investment limits are provided in Section 5.1.2 of the Guidelines for Credit Guarantee Scheme for Cottage, Micro and Small Enterprises (CMSE).

3. It has been complained that primary level entrepreneurs in the CMSE sector are not receiving small amounts of loan/investment facilities from banks due to lack of collateral. Additionally, there is a need to increase the maximum loan/investment limit under the Credit Guarantee Scheme in the implementation of the incentive package for this sector. In this context, to ensure 100% implementation of the distribution of the 2nd phase of the stimulus package of $20,000 Crore Taka announced by the Honorable Prime Minister in the CMSE (Cottage, Micro, Small and Medium) sector, it has become necessary to redetermine the loan/investment limit of the scheme to further increase the flow of loan/investment in the sector by including primary level entrepreneurs in the CMSE sector and other affected entrepreneurs under the Credit Guarantee facility of the Credit Guarantee Scheme.

4. In the aforementioned context, to accelerate the national economic recovery program through the rapid implementation of special loan/investment facilities for the CMSE sector, the loan/investment limits mentioned in Serial No. 1.6 of SMESPD Circular No. 03/2020, i.e., a minimum of 2 (Two) Lakh Taka and a maximum of 50 (Fifty) Lakh Taka, have been redetermined to a minimum of 25 (Twenty-Five) Thousand Taka and a maximum of 1 (One) Crore Taka respectively.

5. Except for the aforementioned instructions, other instructions of SMESPD Circular No. 03/2020 and the Guidelines for Credit Guarantee Scheme for Cottage, Micro and Small Enterprises (CMSE) shall remain unchanged.

This directive shall be implemented immediately.

This directive is issued under the powers conferred by Section 45 of the Bank Company Act, 1991 and Section 18 of the Financial Institutions Act, 1993.

Yours faithfully,

(S M Mohsin Hossain)
General Manager
Phone: 9530221