February 12, 2022 7:26:16 p.m.
February 13, 2022 11:37:56
Several procedural bottlenecks are holding back the rapid disbursement of stimulus funds to small and medium-sized enterprise (CMSME) borrowers, experts said at a workshop on Saturday.
They pointed out that a superficial understanding of the CMSME sector, the lack of necessary documents, the lack of uniformity and consistency in the documents submitted, the complicated disbursement process, the poor relationship between banks and entrepreneurs, the Collateral issues and lax coordination between entrepreneurs and financial institutions constrain the disbursement of stimulus loans to CMME borrowers.
The observation was made at a workshop entitled “Procedures and preparation for obtaining a loan from a stimulus package from banks”, organized today by the Chamber of Commerce and Industry of Dhaka (DCCI) in the capital, according to a press release.
DCCI Chairman Rizwan Rahman, in his welcome speech, said that 80% of total employment in the industry comes from CMMEs, bringing around 45% of added value to the manufacturing sector.
“But the lack of financial and political support prevents the CMSME sector from utilizing its full capacity,” he said.
“The complex definition of CMSME, lack of required documents, complicated disbursement process, lack of bank account, poor relationship between banks and contractors, collateral issues and lack of database mean that CMSME entrepreneurs find it difficult to get loans,” Rahman said.
He called for quick and easy loan disbursement to revive the CMSME sector.
The Managing Director (SMESPD) of Bangladesh Bank, Mr. Jaker Hossain, who was present as the guest of honor of the programme, said: “Disbursement of loans under stimulus is quite satisfactory in the urban area but there isn’t up to snuff in remote areas. .”
He informed that 155 billion taka had already been disbursed from the first phase of the 200 billion taka stimulus package, while 62.17 billion taka had been disbursed as of February 9 from the second phase of the stimulus money. of 200 billion taka.
Saying that the misconceptions of bankers and contractors on the ground are delaying the disbursement process, Hossain urged loan seekers to keep proper documents and cooperate with banks to get loans faster.
He also urged bankers to refrain from causing unreasonable harassment to loan seekers.
The definition of CMSME will be reviewed in the next new industrial policy, Hossain added.
The Executive Vice President of Islami Bank Bangladesh Ltd, Md Rafiqul Islam, emphasized the establishment of an SME database for loan disbursement in his keynote address.
“CMMEs represent 90% of companies. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. The first condition for a streamlined loan disbursement process is to categorize entrepreneurs by segment. »
Mentioning that the policies of Bangladesh Bank are very flexible, he said that according to BB guidelines, 30% of loans from banks and financial institutions dedicated to MSMEs have an easy sanctioning process.
He asked loan seekers to maintain consistency and consistency in submitted documents as banks require a minimum set of documents for transparency before sanctioning a CMSME loan.
DCCI Senior Vice President Arman Haque moderated the Q&A session during the workshop.
More than a hundred DCCI CMSME members participated in the virtual workshop, the statement added.