The Bangladesh Bank has announced a Tk 100 billion refinancing fund to provide working capital for small and medium-sized enterprises (SMEs) affected by the nationwide shutdown over the coronavirus outbreak.
The fund will form part of the government's Tk 200 billion stimulus package for SMEs aimed at mitigating the impact of the lockdown.
The central bank issued an outline on lending under the scheme for banks and financial institutions on Monday, reports bdnews24.com.
The interest rate on the loans has been capped at 9 per cent, of which the government will subsidise 4.5 per cent, according to the notice. The borrower will pay rest 4.5 per cent interest rate.
"The refinancing scheme has been set up to assist banks," said Kazi Saidur Rahman, executive director of Bangladesh Bank.
"Banks that have the funds can disburse loans to the industry owners from it. But those who lack the funds can take low-interest loans from the central bank and disburse it at higher rates."
On Apr 5, Prime Minister Sheikh Hasina unveiled five stimulus packages totalling Tk 727.7 billion to cushion the impact of the coronavirus outbreak on the national economy. Of that, Tk 300 billion was allocated for industries with another Tk 200 billion set aside for SMEs.
Earlier on Apr 23, the central bank had also announced a Tk 150 billion refinancing fund to go towards the Tk 300 billion stimulus for industries, setting the interest rate ceiling at 9 percent.