Alongside term loan, the cottage, micro, small and medium enterprises (CMSMEs) will now get credit-guarantee facility against working capital and trading capital under the Tk 250-billion refinancing scheme for them.
The Bangladesh Bank (BB) took the decision - considering the current economic situation and the necessity of formal credit for the small businesses.
Earlier, the BB allowed only term loan under the refinancing scheme. The central bank issued a circular on Tuesday regarding expansion of the facility.
According to the circular, the loan limit under the credit guarantee scheme is fixed between Tk 25,000 and Tk 10 million for the clients involved in cottage and micro-level production and service sectors.
The customers in small-level production sector will get credit ranging from Tk 0.1 million to Tk 30 million, while such group of people in service sector will get loan from Tk 25,000 to Tk 10 million.
The BB notice informed that the clients in medium-level production sector will get credit ranging from Tk 0.1 million to Tk 50 million, while the businesses in service sector will get loan between Tk 0.1 million and Tk 20 million.
On the other hand, the micro-level businesses will be entitled to receive credit from Tk 25,000 to Tk 2.5 million, while the loan limit for the small businesses is fixed between Tk 25,000 and Tk 10 million.
Welcoming the decision, Business Initiative Leading Development (BUILD) trustee board member Abul Kasem Khan said they have long been pursuing the matter, as the CMSMEs need working capital.
The small businesses were affected most during the Covid-19 pandemic, he said, calling upon the lending institutions to simplify procedure, so that the CMSMEs can get credit without hassle.