DHAKA, June 8, (V7N) – Bangladesh Bank today launched a Tk 5,000 crore revolving refinance fund for the Cottage, Micro, Small and Medium Enterprise (CMSME) sector to ease working capital shortages, boost production, and support employment generation. The scheme will remain effective for three years from the date of issuance.
Under the scheme, Bangladesh Bank will provide refinance to participating banks at an interest rate of 4 percent, while banks may charge a maximum of 9 percent to end borrowers. The revolving nature of the fund will ensure continued liquidity as repayments are recycled into new financing. Borrowers will be eligible for a grace period of three to six months.
Active CMSMEs experiencing production or service disruptions due to working capital shortages will be eligible for financing. However, borrowers classified as defaulters by the Credit Information Bureau (CIB) will not qualify. Clients already benefiting from other refinance schemes may also be considered subject to banks' assessment.
All scheduled banks will be eligible after signing a Participation Agreement. Banks maintaining an advance-to-deposit ratio above 70 percent will receive priority. Participating banks bear full responsibility for loan recovery and must repay Bangladesh Bank regardless of recovery from borrowers.
Bangladesh Bank expects the fund to contribute to income growth, employment generation, and development of import-substituting products and services, while supporting small entrepreneurs and stimulating industrial activity.
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