Most banks miss out on loan-disbursement target under the second-phase stimulus package for helping out cottage, micro, small and medium enterprises (CMSMEs), belying a drive by the central bank.
Industry-insiders say the banks are facing difficulties in selecting fresh clients for sanctioning loans under the package as many clients have yet to be able to repay their previous loans.
New customer selection is still a major problem considering credit recovery along with ensuring the quality of assets for disbursement of loans under the package, they note to explain the lapses.
Forty-nine scheduled banks and seven non-banking financial institutions (NBFIs) had disbursed Tk 68.18 billion, only 34 per cent of total Tk 200 billion in the package aid for survival of the CMSMEs, until February 28, according to the central bank's latest monitoring report.
Only three banks along with an equal number of NBFIs could achieve such lending target from July 2021 to February 2022.
Such loan disbursement reached Tk 74 billion as on March 09, officials said.
The dismal lending scenario is set to be discussed at a meeting of top executives of the banks, scheduled to be held at the Bangladesh Bank (BB) headquarters in Dhaka today (Thursday) with BB Governor Fazle Kabir in the chair.
At the same meeting, implementation of Credit Guarantee Scheme (CGS) is also likely to be discussed, according to the officials.
The central bank had introduced a CGS worth Tk 20 billion for the first time aiming to expedite financing in the country's cottage, micro and small (CMS) enterprises.
The central bank may seek explanation from the senior bankers about lower disbursement of loans under the package at the meeting, they add.
"We'll ask the banks for taking effective measures to achieve their loan-disbursement target under the package by June 30," a BB senior official told the FE Wednesday.
He also says the central bank is working continuously for implementation of the second phase of CMSMEs to help revamp the coronavirus-hit economy.
At the meeting, the top bankers may urge the central bank to relax its regulations allowing more trade-based financing under the package for strengthening disbarment of the low-cost credits in the coming months.
Under the existing regulations, banks and NBFIs are now allowed to lend maximum 35 per cent for trading purposes instead of 30 per cent earlier while remaining 65 per cent for both manufacturing and services.
As per the package, all types of borrowers will be entitled to enjoy interest subsidy at 5.00 per cent for a period of maximum one year.
During the period, the borrowers will pay the interest rate at 4.00 per cent out of the 9.0 per cent under the package, while the remaining 5.00 per cent will be paid by government as interest subsidy to the banks and NBFIs concerned.
The borrowers who availed assistance from the first package would not be eligible for the second phase in line with the BB policy.
But loans of the borrowers will be continued in line with the 'bank-customer' relationship, paying 9.0-per cent interest instead of 4.0 per cent earlier, according to the BB officials.
In the first phase, the banks and NBFIs had disbursed Tk 153.87 billion of the stimulus package until June 30 last, BB data showed.
The disbursed amount was nearly 77 per cent of the total Tk 200-billion funds for the sector.
A total of 97,814 Covid-affected CMSMEs across the country benefited through receiving the low-cost loans under the first tranche of recovery aid.
