Banks, FIs can give loans to CMSMEs from AIIB fund

| Updated: February 18, 2023 08:36:57

Banks, FIs can give loans to CMSMEs from AIIB fund

The Bangladesh Bank (BB) on Thursday said the banks and financial institutions (FIs) can now sanction term loans to the cottage, micro, small, and medium enterprises (CMSMEs) from the Asian Infrastructure Investment Bank (AIIB)-sponsored fund.

There is an AIIB fund worth US$ 300 million to mitigate adverse effects of the pandemic in Bangladesh. The fund is used to sanction loans for providing working capital to the CMSMEs.

The BB circular - issued in this regard by the project implementation unit of the COVID-19 emergency and crisis response facility project - said: "It has been decided to extend the refinance facility to the participating FIs against term loan investment of up to three years to the CMSMEs from the date of issuing the SMESPD circular on September 09, 2021."

The refinanced amount will be realised after one year from the date of refinancing along with applicable interests. The interest rate will be 4.0 per cent for refinancing loan/investment, which will be charged at the time of realisation of principal amount.

Currently, 19 banks along with seven FIs have agreements with the BB on refinancing schemes.

The BB circular, however, asked the banks and FIs to involve more institutions in the refinancing schemes.

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