Bangladesh Bank's deputy governor Abu Farah Md. Nasser has said despite having a credit guarantee scheme of Tk 20 billion for cottage, micro, small, and medium enterprises (CMSME), loans of only Tk 1.92 billion has been disbursed so far under the facility, which he said was "disappointing".
He said proper utilisation of this credit guarantee scheme is crucial for the revival of CMSMEs, reports UNB.
Nasser said this while speaking as the chief guest at a workshop titled "Issues and Opportunities of CMSME Lending", organised by the Dhaka Chamber of Commerce and Industry (DCCI) on Saturday in the capital.
"Though the CMSME sector is called the engine of our economy, and CMSME financing is the fuel of that engine, the financing in this sector is disappointing despite taking different initiatives by the central bank," he added.
Nasser also said that to reach out to the CMSMEs, banks should think of establishing more sub-branches across the country rather than creating agent banking because creating sub-branches help cut extra administrative costs.
"We are going through a tough time due to the Ukraine-Russia war and at this time if we try to control interest rates forcibly, it may create a recession," he added.
The manufacturing and service sector should get priority in getting loans right at this moment to control inflation, considering the global scenario, he said.
The Bangladesh bank deputy governor urged the experts to think about developing an online marketplace and block-chain as alternatives to the traditional loan system.
Bangladesh Bank has identified a total of 19 clusters, and Nasser urged all the banks to give CMSME loans under these clusters. Later he said that creating a Digital Bank (special focus on CMSMEs) is in the planning of Bangladesh Bank.
DCCI President Rizwan Rahman said, "CMSME sector plays an important role in making our economy grow but due to lack of policy support and financial support, we cannot fully utilize this sector. Commercial banks and financial institutions sometimes sense risks in giving loans to CMSMEs."
Till 2022, 73.77 per cent of the stimulus, or Taka 147.46 billion has been disbursed but most of it went to medium enterprises.
He also said that regulators should give CMSMEs more access to information and communication technology, and financial assistance so that they can have the ability to boost manufacturing and be competitive in the supply chain process.
Md. Jaker Hossain, director, SME and Special Programmes Department of Bangladesh Bank, presented a keynote paper.
Md. Nazeem Satter, general manager, SME Foundation, in his separate keynote paper highlighted that there are more than 7.8 million CMSMEs across the country. He said only banks are not sufficient to ensure loans for CMSMEs, rather, alternative capacity of MFIs, NGO Foundation, Karmasangsthan Bank, BSCIC, SME Foundation should be utilized to disburse loan among the CMSMEs.