Lenders in Bangladesh are failing to implement the second phase of the stimulus package for the cottage, micro, small and medium enterprises (CMSME) sector as majority clients struggled to repay the loans secured under the first round even as many of them recently asked lenders to renew loans as their businesses were still struggling to recover and return to pre-pandemic levels.
Media reports maintained this citing bankers and business people in this regard while adding that in April 2020, Bangladesh’s central bank (Bangladesh Bank) unveiled a stimulus package worth Taka 20,000 crore for the CMSME sector to protect it from the impacts of the coronavirus pandemic even as of the total sum, around 77 per cent was disbursed — as per rules, the funds, which are given in the form of working capital, have to be paid back within a year from the disbursement date — while the tenure of the first round of the stimulus loans, reportedly, expired in June even as the Bangladesh Bank has allocated another Taka 20,000 crore for the current fiscal year as the economy was yet to return to normalcy from the pandemic-induced slowdown.
The stimulus programme will continue for three years, claimed reports, adding 63 banks and non-bank financial institutions signed a participation agreement with the Bangladesh Bank to give the loans even as they lent out only Taka 1,555 crore between 1 July and 23 October, under the second round, while 59 lenders have, reportedly, failed to hit at least 25 per cent of their disbursement target in the first quarter of the current fiscal year.
