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The Bangladesh Bank is now focusing on controlling imports and inflation and promoting local production to generate employment.
“For this, we have announced a new Credit Guarantee Scheme on refinancing against Term Loan of Tk 250 billion of which 75 per cent is meant for cottage micro and small enterprises and the remaining scheme for medium enterprises,” said Bangladesh Bank Deputy Governor Abu Farah Md Nasser.
He was speaking at the 10th meeting of the Financial Sector Development Working Committee (FSDWC) organised by the Business Initiative Leading Development (BUILD) on Wednesday, said a press release.
Abu Farah and Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman co-chaired the meeting. Abu Farah said that an open interest cap will accumulate more stress on small-business owners who are struggling with debt and will add more cost to production thus highly influencing the cost of business.
The central bank is trying to combat inflation and at the same time ensure employment generation where CMSMEs play a vital role, he added.
Rizwan Rahman said that businesses should remain aware of all policy changes of the regulators and the women’s chambers should shoulder responsibilities to come forward in educating their members about all existing regulatory benefits they can avail. He said the focus on collateral-based finance should be changed to cash flow-based finance which the BB is doing now.
BUILD CEO Ferdaus Ara Begum, who placed two presentations on Constraints of Availing Financial Support of Women Entrepreneurs and Overseas Equity Investment Rules 2022, said the CMSME Loan Categorisation policy of Bangladesh Bank allows trading and some non-traditional sectors under the category so that the financial institutions can fund them. But they cannot avail funds since they are not under CMSME Loan Categorisation, she said.
For the ease of availing of finance, she underscored the need for advisory support, documentation support, format for financial reports etc.
Md Amirul Islam, Deputy Director of Bangladesh Bank, appreciated the study on equity investment of BUILD and informed that BB has already given permission for $70 million and repatriated $40 million and informed some policies of BB for supporting investments other than exporters.
SMEF GM Farzana Khan said that SMEF has already identified 177 clusters and a definition will be included in the upcoming industrial policy which is aligned with BB definitions.
Wasfi Tamim, CEO, Bangladesh Center of Excellence, Md Jahangir Alam Chowdhury of the University of Dhaka, Fauzia Hoque FCA, AKM Monirul Hoque from Bangladesh Insurance Association, Khairul Majid Mahmud, former Director, DCCI, Md Mazedul Hoque, Kamruzzaman Khan from Lanka Bangla, Naim Rahat of Dana Fintec also spoke at the event among others.
