Regulatory Alerts2020-07-27
Added · Updated
SMESPD Circular No. 03: Credit Guarantee Scheme for Cottage, Micro and Small Enterprises
The Bangladesh Bank establishes a Credit Guarantee Scheme for collateral-free working capital loans to Cottage, Micro, and Small (CMS) enterprises, covering up to 80% of the loan amount within a portfolio cap of 30% of the bank's CMS portfolio. Eligible scheduled banks must have at least three years of experience in the CMS sector and a classified loan ratio of 10% or less, with loan amounts ranging from 200,000 to 500,000 BDT. The scheme mandates a 1% annual guarantee fee, applies a 9% interest rate, and requires banks to exhaust legal recovery measures before claiming guarantees on defaulted loans.