Workshop on "Procedures and preparedness of getting loan from stimulus package from banks”

Definition of CMSMEs, lack of required documents, complicated loan disbursement process, absence of bank account, poor relation between banks and entrepreneurs, collateral issues, lack of consistency and coherence of documents and coordination among the entrepreneurs and financial institutions are some of the bottlenecks that hinder faster disbursement of stimulus to the CMSMEs, speakers said in a workshop on “Procedures and preparedness of getting loan from stimulus package from banks” organized by Dhaka Chamber of Commerce & Industry (DCCI) on February 12, 2022. Jaker Hossain, General Manager (SMESPD), Bangladesh Bank was present as guest of honour.

DCCI President Rizwan Rahman in his welcome remarks said 80% of total employment in the industry sector comes from CMSMEs contributing about 45% value addition in the manufacturing sector. But due to lack of financial and policy support, the CMSME sector could not utilize their fullest capacity and potentials. In order to help the harmed CMSMEs in the pandemic and to revive the economy, government has declared a stimulus package of taka 40,000 crore only for the CMSME sector in two phases but due to complex definition of CMSME, lack of required documents, complicated disbursement process, not having a bank account, poor relation between banks and entrepreneurs, collateral issues and lack of database, CMSME entrepreneurs sometimes face difficulties in getting loans. He however, urged for easy and faster implementation of loan disbursement for the revival of CMSMEs.

Guest of Honour Md. Jaker Hossain, General Manager (SMESPD), Bangladesh Bank said that the disbursement of loan under stimulus is quite satisfactory in city area but in remote areas it is not up to the mark. He informed that from the first phase of stimulus of Taka 20,000 crore, Taka 15,500 has already been disbursed and from the 2nd phase of Taka 20,000 crore, Taka 6,217 crore has been disbursed as of 9 February, 2022 which is 31% of the allotment in 2nd phase. He said in the field level there might have some misconceptions among the bankers and entrepreneurs that hinder slow disbursement process. He also requested the loan seekers to maintain proper documents and cooperate with banks to get loan in a faster manner. He also said that banks are not reluctant to give loans but they are aggressively looking for CMSME clients now. Regarding definition of CMSMEs, he said that it will be redefined in the next new Industrial Policy. “We have to promote real SMEs and for that we have to change our mindset to facilitate real SMEs”, he added. He also requested the bankers not to harass the loan seekers without any reason.

Md. Rafiqul Islam, Executive Vice President, Islami Bank Bangladesh Ltd. in his keynote paper said that a SME database is very essential for distributing loans. CMSMEs represent 90% of businesses. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies, he added. For getting loans under stimulus, at first, an entrepreneur needs to be categorized that under which segment he belongs, then it would be easy to give loan. Policies of Bangladesh Bank are very flexible and adequate, he said. As per the guidelines of Bangladesh Bank, 30% of loans of banks and financial institutions dedicated to MSMEs having an easy sanction process. He also said that a banker has to follow almost 86 rules and regulations in the day to day banking activities. He said for a CMSME loan a minimum set of documents are needed as banks have to comply with financial transparency therefore he requested loan seekers to maintain consistency and coherence of submitted documents. In this regard, he said digitalization of all services will help the process a lot. Banks are ready and very willing to disburse loan but number of proposals are not very remarkable, he mentioned.

DCCI Senior Vice President Arman Haque moderated the question answer session. More than a 100 CMSME members of DCCI participated in the workshop held virtually for better understanding on how to avail loans under stimulus easily.

Published on: 2022-02-12

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