Stimulus package rules for low-income group eased

Bangladesh Bank has relaxed rules for the stimulus package worth Tk 3,000 crore rolled out for low-income group people, farmers and small businesses hit hardest by the Covid-19 pandemic last year.

Under the scheme, the soft loan will be disbursed through the different banks and microcredit financial institutions.

For a small entrepreneur, the borrowing limit has been raised to Tk 15 lakh from Tk 10 lakh and for a group comprising five individuals, the limit was set at Tk 60 lakh from Tk 30 lakh, according to a circular issued by the BB on Thursday.

The loan allocation for small entrepreneurs also increased to 35 per cent from 25 per cent of the stimulus package. And the banks will be allowed to disburse loans the remaining 70 per cent to the small business sector.

However, the highest ceiling on the interest rate for borrowers remained the same at 9 per cent, said the circular. The interest rate was much lower than the interest rate usually charged by the microcredit entities, said a BB official.

The banks will charge the microcredit entities 3 per cent interest, which was 3.5 per cent for the loan disbursement among the affected group.

As per the new rules, the central bank would disburse the fund from the stimulus package to the banks at 0.5 per cent interest, which was 1 per cent.

The banks were earlier allowed to disburse the fund only through microcredit financial institutions. Now the bank can also disburse the fund directly to their clients. In April last year, the BB launched the revolving refinance scheme for three years.