The Financial Express

Deadline for disbursing stimulus money among smaller enterprises extended

| Updated: December 04, 2020 11:05:52

Evaly and Fianancial Express Evaly and Fianancial Express
Illustrative photo Illustrative photo

The central bank has extended the deadline further to implement the stimulus package for cottage, micro, small and medium enterprises (CMSMEs) from November 30 to December 31.

It has also relaxed regulations allowing more trade-based financing under the package in line with the stakeholders' requirements.

Banks and non-banking financial institutions (NBFIs) are allowed to lend maximum 35 per cent for trading purposes instead of 30 per cent earlier, according to a Bangladesh Bank (BB) notification on Thursday.

The remaining 65 per cent has been allowed for both manufacturing and services.

Banks and NBFIs earlier were eligible to provide minimum 70-per cent loan to both manufacturing and services under the package.

"We've extended the deadline further along with relaxation of regulations to help banks and NBFIs to execute the package for CMSMEs properly," a senior BB official told the FE.

He said banks and NBFIs are now allowed to lend as working capital to their customers under the package based on banker-client relationship instead of the BB ceiling set earlier.

The central bank earlier imposed a 50-per cent cap on the existing loan limit under the package.

The latest move came against the backdrop of slow progress in loan disbursement under the package for CMSMEs until November 19.

The banks and NBFIs disbursed Tk 77 billion of the stimulus package by then.

The disbursed amount is 37 per cent of the total Tk 200-billion financial support for the sector. Loans amounting to Tk 95 billion were approved for an estimated 55,000 Covid-hit CMSMEs countrywide during the period, according to the latest BB statistics.

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