Lenders get until June to disburse stimulus for CMSMEs

This is the fourth extension issued by the central bank

Banks and non-bank financial institutions (NBFIs) now have three months, until June 30 this year to execute the stimulus package for cottage, micro, small and medium enterprises (CMSMEs).

Bangladesh Bank on Monday extended the deadline as banks and NBFIs were not able to complete the implementation process of the stimulus fund within the previous deadline, which was March 31 this year.

Until the previous deadline, banks and NBFIs disbursed 72.31% of the total Tk20,000 crore, said the BB notice issued on the day.

This is the fourth extension issued by the central bank for implementing the stimulus package disbursement.

Some banks and financial institutions have been able to disburse loans as per the target, while some failed, said a top official of the central bank.

He also said that the failure of those banks and financial institutions has hampered the expansion of desired production and services in the CMSME sector.

Earlier on July 2 last year, the central bank asked all banks to take effective measures for implementing the stimulus packages including the CMSME sector within August of the same year.

On April 13 last year, BB, in line with the government’s announcement, issued guidelines on providing working capital facilities amounting to Tk20,000 crore to the CMSME sector affected by the coronavirus pandemic, setting the interest rate ceiling at 9%.

Of the 9% interest, the government will bear 5% as subsidy and the remaining 4% will be borne by borrowers.

But, banks and NBFIs have been lending slowly to businesses belonging to the cottage, micro, small and medium enterprise (CMSME) sector, it has been alleged.