BRDB for using loan repayments to refinance CMSMEs

The Bangladesh Rural Development Board (BRDB) has urged the Finance Division to approve its refinance/reinvestment plan with the money that has been sitting idle following repayments by rural entrepreneurs who received loans under a Covid-19 stimulus package.

BRDB sent a letter to the division’s senior secretary in this regard on July 3.

After the pandemic nearly shut down the country’s economic activities and businesses incurred huge losses, the government announced several incentive packages to help businesses recover and revive the economy.

BRDB had disbursed Tk 300 crore as loans among cottage, micro, small, and medium enterprises (CMSMEs), especially the rural entrepreneurs, around the country in FY2020-21 and FY2021-22 under one such scheme.

Until May 2022, the board has received around Tk 24 crore from the entrepreneurs who paid the amount in loan repayment instalments. However, the money has remained unused in the banks at the upazila level since there is no direction regarding further refinancing, said BRDB.

Due to the impacts of the lingering pandemic and the ongoing Russia-Ukraine war, BRDB said it is considering disbursing the Tk 24 crore as loans again to the affected entrepreneurs.

It will be prudent to refinance the CMSMEs with the unused money to help them get back on their feet. Otherwise, the poverty and unemployment rates will only increase, BRDB said in the letter.